Emerging Europe Economics Update Turkey: bar for policy rate hikes is very high Turkey’s central bank kept its key policy interest rates on hold today and, while the accompanying statement acknowledged growing upside risks to inflation, it looks like that the focus will remain on... 20th August 2020 · 3 mins read
Emerging Europe Data Response Turkey Industrial Production & Retail Sales (Jun.) Turkish industrial production and retail sales continued to rebound strongly in June but even so it looks like the slump in GDP over Q2 as a whole is likely to have been in the region of 20% q/q or so... 14th August 2020 · 3 mins read
Emerging Markets Economics Update Why Turkey contagion risks are smaller than in 2018 Concerns are mounting that Turkey is on the brink of a fresh currency crisis which, were it to materialise, could trigger some turbulence in other EMs’ financial markets. But it’s unlikely to result... 13th August 2020 · 3 mins read
Emerging Europe Economics Update Turkey’s banks still the weak link Turkey’s banks are more vulnerable now to a sell-off in the lira and a tightening of external financing conditions than they were in the run-up to the 2018 currency crisis. 12th August 2020 · 3 mins read
Emerging Europe Economics Update Turkey’s FX reserves flashing red Turkey’s central bank (CBRT) has burned through its FX reserves to defend the lira this year, but the CBRT’s firepower is severely depleted and reserves are now so dangerously low that monetary... 11th August 2020 · 3 mins read
Emerging Europe Economics Update How will policymakers respond to the falling lira? If strains in Turkey’s balance of payments fail to ease, the central bank will probably tighten monetary conditions more aggressively within the interest rate “corridor”. But use of the corridor alone... 10th August 2020 · 3 mins read
Emerging Europe Economics Update Assessing the hit to Turkey’s current account position Turkey’s current account deficit has widened to levels not seen since 2018, which can partly be explained by a slump in tourism receipts. While this should start to reverse over the rest of this year... 6th August 2020 · 3 mins read
Emerging Europe Data Response Turkey Consumer Prices (Jul.) Turkish inflation eased by more than expected in July, to 11.8% y/y, but this is unlikely to prompt the central bank to restart its easing cycle. Indeed, with pressure on the lira building, the next... 4th August 2020 · 2 mins read
Emerging Europe Economics Update Further falls lie in store for Turkish lira Today’s depreciation of the Turkish lira marks the first significant departure from the de facto peg that has been in place over the past month and, if tensions with the EU continue to escalate... 28th July 2020 · 3 mins read
Emerging Europe Economics Update Turkey: rates on hold as inflation concerns grow Turkey’s central bank kept interest rates on hold today and it’s clear from the accompanying statement that inflation concerns are preventing further easing. We think that rates will now be left on... 23rd July 2020 · 3 mins read
Emerging Europe Data Response Turkey Industrial Production & Retail Sales (May) Turkish activity data for May show that industrial production and retail sales recovered from their low point in April but it still looks like Turkey suffered one of the largest contractions in Q2... 13th July 2020 · 3 mins read
Emerging Europe Economics Update A deep dive into Turkey’s latest credit boom Turkey’s credit boom that started towards the end of last year has been turbocharged in recent months and this should provide some welcome support to the economy as it emerges from the coronavirus... 9th July 2020 · 5 mins read
Emerging Markets Economics Update What would financial repression look like in EMs? Several EMs in Latin America, as well as South Africa, Nigeria, India and Turkey could use financial repression policies to deal with the legacy of higher public debt burdens resulting from the... 9th July 2020 · 7 mins read
Emerging Europe Data Response Turkey Consumer Prices (Jun.) The jump in Turkish inflation in June, to 12.6% y/y, as well as last week’s surprise decision by the central bank to leave interest rates unchanged, reinforces our view that the easing cycle is over... 3rd July 2020 · 3 mins read
Emerging Europe Economics Update Turkey’s central bank closes the door on easing cycle Turkey’s central bank unexpectedly left interest rates on hold today and it’s difficult to see how economic conditions will change in such a way over the coming months to justify renewed easing. We... 25th June 2020 · 3 mins read
Emerging Europe Data Response Turkey Industrial Production & Retail Sales (Apr.) The plunge in Turkish industrial production and retail sales in April suggests that the economy suffered a almighty hit to GDP in Q2 – we expect the economy to suffer one of the largest contractions... 12th June 2020 · 3 mins read
