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● Balance of Payments: Current account deficit continues. Financial outflows will be watched in the coming period.
● Eurobond auctions?: The Treasury did not come up with an auction in February while corporate sales also stopped. It will be watched what will happen following the central bank shake-up.
● NPLs, bailouts and debt restructuring queues continue (See Section 7.1.4).
● Snap polls?
Domestic politics, social dismay and the latest lira depreciation will be Erdogan’s main troubles in the period ahead. He faces a tough shift. It could lead him to some frenzies.
2.2 How short can Turkey go to defend its lira?
On March 18, the central bank hiked its policy rate by 200bp (versus 100bp market expectation) to 19%. It was thought that the Erdogan game-plan would be to keep the finance industry as an anchor while laying waste to all remnants of what could still be described as part of a democracy.
Within around 36 hours, by late on March 19, it was shown with the announcement on the central bank governor shift once more that analysts trying to decode the regime’s moves day by day are truly in a desperate
8 TURKEY Country Report April 2021 www.intellinews.com