Page 7 - TURKRptJul21

The new central bank governor Sahap Kavcioglu reiterated a few times that inflation would peak at around 17% in April before easing.
● July 5: Official inflation for June (May: 16.59%, down from 17.14% in April). Despite the impacts of the ongoing currency shock, the government continues to insist that inflation is falling.
● July 14: Monetary policy committee meeting decision at 14h Istanbul time.
June 17: Hold at 19%.
The thinking is that a rate cut is on the way at the July 14 meeting after the June inflation release on July 5 confirms a declining trend in official inflation.
● Lira loans flow: Not booming.
● USD/TRY: The dam is broken again. Latest record: 8.8061 on June 25.
Finance industry is calling for some 10s before stabilizing at around 9.50s. The government still has some control.
● Balance of Payments: Current account deficit continues. Financial outflows are watched.
Some more portfolio outflows from Turkey are expected. There won’t be much left soon.
As a result, the game will be played only among locals and the current account deficit will be watched.
It was early in November when it dawned on the government that it did not have the firepower to continue defending the lira the way it had been.
A sharp U-turn that brought in a central bank governor triggered hot money inflows from abroad. On March 19, the governor was fired.
● Eurobond auctions.
7 TURKEY Country Report July 2021 www.intellinews.com