Thursday, 30 January 2014

money policy decisions at midnight

The situation in Turkey from December, 17 was continuing, with especially EUR/TRY and USD/TRY rates, (recorded highest rates as... 3.203 and 2.3335)
Then, Central Bank of Turkey decided to intervene as for controlling this high leakage of Turkish Lira.
Today I mean at midnight, they have announced that the interest rates and one week repo rate  in the interbank market and BIST Repo Repurchase-Reverse Repurchase Agreement markets, have been increased as: 

  • Overnight Interest Rates: Marginal Funding Rate from 7.75% to 12%, borrowing rate from 3.5% to 8%, and the interest rate on borrowing facilities provided for primary dealers via repo transactions from 6.75% to 11.5%.
  • One-week repo rate, from 4.5% to 10%.
  • Late Liquidity Window Interest Rates (between 4:00 p.m. – 5:00 p.m.): Borrowing rate is kept at 0%, lending rate, from 10.25% to 15%.

With these these announcements, EUR/TRY and USD/TRY rates followed a downtrend during the day. But, in the medium run, surely, a high inflation rate problem can be arisen.
On the other hand, tonight The US Federal Reserve reduced its monthly asset purchases by $10bn - as expected. But this reduction in the monetary expansion of USA, even it has been expected, in Turkey, can cause the expectations about increasing of USD/TRY rate. In the medium run, I think that Central Bank's interest rates decisions will be less effective on USD/TRY rate than EUR/TRY rate.

Monday, 6 January 2014

some corruption in these days

In these days, in Turkey... having a government which is on the news with some corruptions and bribery scandals. Actually, all Turkish people need more explications about this scandal, especially from prime minister. But, on the contrary, instead of making a detailed declaration, he defends his ministers and deputies.
We can just see meanwhile, how doesn't it work our law system... as the recent lawsuits (e.g Balyoz, Ergenekon)... But, these recent lawsuits won't be this post's topic.
How doesn't it work our law system, while the government can change all constitutional provision as they wish and while all prosecutors are accredited by the government as they wish...
We can see at the same time, how doesn't the government reach to the targets for exchanges rates.
As of the last friday of 2013, EUR/TL was 2.97 and USD/TL was 2.15, BIST 100 index was 63.885.
Also, we could see two kinds of TV channel, just as during the Gezi Park protests. Because, people protested this corruption and bribery scandal on the streets, in Istanbul, Ankara etc. Most TV channels do not show anything, while these protests are broadcast live by 2 or 3 TV channels.
At the same time, while the prime minister declares to the people which acclaim him at the airport, that the nation will decide at the elections whether these ministers and deputies are guilty or not. That means that if Turkish people vote for this political party, he can say then these ministers and deputies are innocent. However, it is clear that it's only the judicial authority which can decide.
Where the most powerful side of them is  "economic stability" according to them, it is not possible to see an economic stability situation with these figures of exchange rates and stock exchange indices. For foreign and domestic investors, Turkey  is on the way to not be a secure place. Happy new year and goodbye hot money...