Page 8 - TURKRptSep21

Burumcekci expects the policy rate to end the year at 19%.
● September 23: Monetary policy committee meeting decision at 14h Istanbul time.
August 12: Hold at 19%.
● Lira loans flow: Recently rising.
● USD/TRY: 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.
The Turkish lira is ready for fresh records.
● Balance of Payments: Current account deficit continues. Financial flows have recently stabilized. There is not much hot money left. As a result, the game is played only among locals and they were on holiday in July.
The current account deficit will be watched after the tourism season ends.
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 stopped in August.
● NPLs, bailouts and debt restructuring queues.
● Snap polls: Erdogan is in trouble in all fields. He is in a big hole. He is open to any kind of frenzy.
● The ultimate end: Turkey still has access to borrowing on the markets—though each instance of borrowing at these costs brings the country closer to the ultimate end, namely an economic and political surrender to an IMF programme.
A new version of the ruling AKP, working under an IMF programme is the likeliest potential major change you might see on the road ahead.
8 TURKEY Country Report September 2021 www.intellinews.com