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of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
TURKEY
- As broadly expected following the CBRT's pivot towards a more dovish reaction function in September, dollarisation has started showing signs of ticking higher in October – reflecting consumer concerns about inflation and TRY stability, despite CBRT comments to the contrary.
- Going back to 2018, we see that USD deposits rise as soon as the CBRT eases the pace of hikes and embarks on a holding period, which then accelerates into the cutting cycle.
- Agbal's short-lived stint as CBRT governor saw a reduction in dollarisation into march before the trend resumed upwards trend following his removal and an extended holding period from Kavcioglu.
- As seen in the right-hand graph, dollarisation has ticked up in the week starting 01-08 October to $234,000 amid elevated CBRT uncertainty and may now embark on the next leg higher as the CBRT looks to ease policy into year-end – placing higher depreciation pressure on TRY and filtering through into second round inflationary effects.
- in 2019, dollar deposits rose +20.26%, +21.26% in 2020, but at current levels are only -0.23% in 2021 – having retraced the 5.79% decrease seen from Jan-March under Agbal.
- Current sentiment regarding the CBRT easing into oncoming CPI headwinds will likely spur these numbers higher in the coming months but will largely depend on the depth/aggression of the impending easing cycle and whether the staff turnover rate remains so acutely elevated.
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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