Page 10 - TURKRptJul22

As of June 29, net lira creation via loans also extended its record on an annual basis to TRY 1 trillion (The figure may decline if the amount of fresh loans declines below the amount of loan repayments in the remainder of the year). The previous all-time high stood at TRY711bn. It was recorded in 2020.
Since May, the government has been tightening monetary conditions again via “macroprudential measures.”
The government is seizing 40% of export and tourism revenues. Those companies that want to use export rediscount credits from the central bank are now obliged to sell 70% of their export revenues and to sign a document that shows they will not buy FX for the next one month.
Turkey’s trade and current account balances are always in deficit and its external liabilities are heavy. So, intermediary goods importers are facing difficulties in finding FX. The tightening cycle here is still working through.
FX derived from exporters and tourism companies is burnt to face FX demand and keep the USD/TRY stable.
The regime is, meanwhile, introducing additional capital controls to prevent companies from buying FX or importing goods with loans.
Capital controls are not enough. On April 20, Erdogan offered a 4% deposit rate to foreigners who deposit their FX at the central bank.
10 TURKEY Country Report July 2022 www.intellinews.com