Page 39 - TURKRptMay20

There was no dash by customers to withdraw deposits while demand for consumer loans was down by 50% and credit card spending was also down 30%, according to Bastug.
8.2 ​Central Bank policy rate
The central bank is in the midst of inputting a record stimulus. Consecutive moves means the “money printing” will continue apace. That may further weigh on the Turkish lira, down by around 15% so far this year against the dollar at levels last seen during the 2018 currency crisis that hit Turkey.
The central bank said bond purchases this year could be up to 10% of its total assets, a rise from 5% previously. It also added a new limit on primary dealers’ ability to sell government debt to it, based on the banks’ repo transactions.
The central bank has since the end of March bought an all-time high of nearly Turkish lira (TRY) 27bn ($3.64bn) of government debt. Most of that was via primary dealers and held by Turkey’s Unemployment Insurance Fund. The fund will have to top up wages and salaries of workers hit by COVID-19 restrictions.
Rumours as monetary policy?​. Officials have stepped up the use of external financing rumours as a monetary policy tool in Turkey.
“Hearing optimism in Turkey that external support could be on the cards via various FX swap facilities from the IMF and Fed/DM central banks,” Timothy Ash of Bluebay Asset Management said on April 17 in a note to investors.
During the weekend, the central bank governor gave a headline to government-run news service Anadolu Agency by suggesting that swap deal talks were being held with G20 central banks.
Anadolu also released a “flash” breaking news item quoting a statement from the presidential palace suggesting that Erdogan had discussed economic measures to be deployed in the coronavirus emergency with Donald Trump.
The White House did not release a statement on this latest phone call, but a statement on its website in relation to the previous call held on April 11 suggests that Trump and Erdogan simply discussed Syria, although Erdogan’s palace reported some economic discussions at that time too.
The market consensus is that a 50bp rate cut will eventuate from the Turkish
39​ TURKEY Country Report​ May 2020 ​ ​www.intellinews.com