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Erdogan Says CBRT Are to Continue to Cut Rates

TURKEY
  • Turkish President Erdogan says that inflation is not the main cause of Turkey's problems, adding that the West's doctrine is that inflation is due to overconsumption and that some citizens still insist on FX-based savings.
  • On rates, Erdogan says that Turkey will continue cutting interest rates, and this government will not increase them. This somewhat contradicts a presentation from the Finmin over the weekend: Finance minister Nebati said that Turkey are not considering either a cut or a raise to interest rates in the short-term, with the government expecting year-end inflation at 48-49%, according to a presentation to lawmakers seen by Milliyet.
  • Also worth recalling that over the weekend that Dunya reported that explicit and implicit dollarization in Turkey has reached 72% - with the share of TRY deposits as a proportion of total bank deposits dropping to 28% from 37.4% before the TRY-protected accounts were launched. The piece adds that the currency-protected TL deposits accounts therefore increased the dollarization of deposits in the banking sector.

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