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Weekly Lists
June 22, 2018 www.intellinews.com I Page 28
bne:Credit
Yield on Turkey’s 10- year bonds touches record high after Erdogan wades back into monetary matters
Fitch sees short term boost for Russia from high oil price, downgrades growth outlook
The yield on Turkey’s 10-year bonds leapt 22 basis points (bp) to 17% on June 20 after touching a record 17.14% as investors fret- ted over renewed calls from President Recep Tayyip Erdogan for cheaper money despite economic difficulties in the country that some observers are already calling an emerging market currency- and-debt crisis.
The increase reversed June 19’s decline that was driven by decent demand at government bond auctions. The embattled Turkish lira (TRY), meanwhile, on June 20 hardly budged.
Out on the campaign trail ahead of the June 24 elections, Erdogan urged voters to give him another five-year term so he can “deal with interest rates,” state-run Anadolu Agency reported. The pros- pect of Erdogan once more grabbing the levers of monetary policy is unsettling to investors.
Russia will see limited near-term economic gains from higher oil prices because of prudent monetary and fiscal policy settings under the country's improved policy framework, which reduces the impact of oil price moves, Fitch Ratings says. Boosting weak medium-term growth prospects is a key challenge for the new government.
In its latest Global Economic Outlook published on June 15, Fitch reduced its 2018 and 2019 Russian real GDP growth forecasts slightly, to 1.8% and 1.9%, respectively, from 2% for both years, following lower-than-expected growth in 2017 and 1Q 2018. “This is despite the rise in oil prices, driven by supply shocks and robust demand. We have increased our oil price forecasts to $70 a barrel this year and $65/bbl next year, up from $57.5/bbl for both years,” Fitch said.
The average mortgage rate in the Czech Republic stood at 2.51% in May with no change against April. The overall number and volume of new mortgages decreased for the first time since 2009, the Fincentrum Hypoindex reported on June 20.
“The Hypoindex stagnated in all areas when compared to April. The average mortgage rate was the same while the number of mortgages granted decreased by 77 to 7,819, and the volume of new mortgages fell by CZK114mn (€4.4mn) to CZK16.7bn (€647mn),” Fincentrum chief analyst Josef Rajdl said.
Average Czech mortgage rate froze in May as banks awaited CNB guidelines
In December, the rate was at a record low of 1.77%.