My subscription
...
Filters
My Subscription All Publications

All eyes on CBRT as Turkish lira continues to tumble

There has been no let up for the Turkish lira today and all eyes are turning to the central bank’s interest rate decision tomorrow. Policymakers’ increased tolerance to falls in the lira as well as pressure from President Erdogan mean that an interest rate cut of 100bp or so still seems likely but a much larger reduction would clearly send Turkish financial markets into a tailspin. Even a hold (or a rate hike) may only provide short-term relief for the currency as much will then depend on the president’s reaction and whether he decides to part ways with another central bank governor.
Jason Tuvey Senior Emerging Markets Economist
Continue reading

More from Emerging Europe

Emerging Europe Economics Weekly

Corporate FX debt risks in Turkey, EU fund hopes

Recent plans announced by the Turkish authorities to restrict access to lira-denominated loans to corporates with large FX holdings add to the growing risks stemming from corporates' large FX debts. Meanwhile, Poland and Hungary are moving closer to unlocking access to some EU funds but a lack of progress on reforms to the rule of law means that these are likely to be delayed for some time. A resolution to the dispute may give a boost to the beleaguered Hungarian forint, but it will not solve all the problems and macro imbalances that have made it one of the worst performing EM currencies this year.
EM Drop-In (Thurs, 7th July): Join our economists for their regular monthly briefing on the hot stories in EMs – and those that aren’t getting the attention they deserve. In this 20-minute session, topics will include the outlook for EM FX markets after the recent sell-offs. Register now.

1 July 2022

Emerging Europe Data Response

Manufacturing PMIs (Jun.)

Manufacturing PMIs for June showed further weakness across the region with the exception of Russia, which seems to have benefitted from a shift from imports toward domestic production. There were some encouraging signs that price pressures and supply disruptions have continued to ease, but we still expect industrial production to weaken sharply in coming months. EM Drop-In (Thurs, 7th July): Join our economists for their regular monthly briefing on the hot stories in EMs – and those that aren’t getting the attention they deserve. In this 20-minute session, topics will include the outlook for EM FX markets after the recent sell-offs. Register now.

1 July 2022

Emerging Europe Economics Update

The impact of Ukrainian refugees on CEE so far

Ukrainian refugees have boosted labour forces and consumer spending across Central and Eastern Europe (CEE) since the outbreak of the war, but this could prove short-lived if the conflict remains concentrated in Eastern Ukraine and more refugees return home. This Update answers some questions on the impact of refugees in CEE so far, and compares these findings to the analysis we made in an Update in March. EM Drop-In (Thurs, 7th July): Join our economists for their regular monthly briefing on the hot stories in EMs – and those that aren’t getting the attention they deserve. In this 20-minute session, topics will include the outlook for EM FX markets after the recent sell-offs. Register now.

30 June 2022

More from Jason Tuvey

Emerging Europe Economics Update

Turkey: threat of currency crisis continues to grow

The Turkish lira has remained under significant pressure at the start of this week and there is a growing risk that the central bank’s continued obedience to pressure from President Erdogan for interest rate cuts results in sharp and disorderly falls in the currency over the coming days and weeks. That would cause inflation to rise even further and broader financial conditions to tighten. Strains would also build in the banking sector and, while it would require a prolonged bout of market stress before a wave of bank defaults became a serious threat, a credit crunch would almost certainly ensue.

16 November 2021

Middle East Data Response

Saudi Arabia Consumer Prices (Oct.)

Saudi inflation edged higher to 0.8% y/y in October and will probably continue to drift upwards over the coming months. Overall, though, we expect price pressures to remain subdued, at 1.0-2.0% over the course of 2022-23, compared with many other parts of the world.

15 November 2021

Emerging Europe Data Response

Turkey Industrial Production & Retail Sales (Sep.)

Turkey’s activity data for September were the proverbial mixed bag with industrial production falling back but retail sales putting in another robust performance. On balance, the data suggest that Turkey’s economy expanded by around 1.5% over Q3 as a whole.

12 November 2021
↑ Back to top