TR Economy & Updates

Deliorman

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04.01.2021 USD/TR 7,36​

21.12.2021 USD/TR 13,02​

TL lost %77 against USD nearly in a year and AKP sells this as a success. In 2022 FED will increase the interest rate 3 times. There is a huge inflation wave is coming starting from the second half of January even the official TUIK yearly inflation will pass %30 mark when the December inflation rate is announced.
Data from



This is exactly what I don’t understand... what are they celebrating? That Turkey isn’t into the shit hole up until it’s forehead but managed to move up and bring the shit down to it’s eyes?
Why our friends here forget that up until a few months ago when Naci Agbal was leading the CB the Lira was worth twice as much than today. What are they celebrating- that financial speculators probably win billions every week off this whole circus?
 

Lool

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Truly never a dull moment in Turkey
The whole world may be stagnating but something must always happen in Turkey

I never in my life saw a currency swing like this in just a month. Hell, even bitcoin doesnt stand a chance
In this month alone, From an exchange of 10 liras to a dollar then to 18 then to 11 then to 14 and finally stabilised for 12 by the end of the day
Forex traders, especially those who longed in this pair, lost a bloody fortune
Volatility is at it max


Erdo's new model is way too risky though
If everything went fine and Turkey's current account stayed as a surplus till the end of the next year, then the Treasury is saved and Erdo one way or another prevent the dollarisation trend. However, if just one massive screw up occurs, Erdo and the treasury are bloody screwed and we can finally say..... good morning to super hyperinflation

IDK if Erdo has Guts and is trying to break to the dollar dominance or he is just outright crazy


And then you have this in Turkey 👇👇; this even made me question my sanity, lool
Truly fun, Will keep an eye on future events taking place

 
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Manomed

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This is marathon war for sustainable and non affective economy by international thugs. One battle is won by Erdogan but there wil be some more challenges before reaching final goal.
13 tl is Victory? They just raised the Interest rate lol that economy might be goos for bosnia not for modern Turks
 
T

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"Foreign exchange-protected TL " Babacan: The open state of working for the interest rate lobby


Ali Babacan, Chairman of the Democracy and Atılım (DEVA) Party, interpreted the currency protected deposits announced to protect the TL as a "disguised interest rate increase".

Babacan said, “This is the clearest form of working with the interest lobby, in their own words. Erdogan's actions are dragging the economy of this country into a swamp," he said.


“Although the decline of the dollar has undoubtedly made our citizens happy, let's not forget that even the falling dollar rate is much higher than the level at the beginning of September. In a way, we were faced with a situation like showing death and consenting to malaria.


Secondly, it is said that public banks were selling foreign currency intensively at the same time as the president's statements. If this is true, if public banks are selling foreign currency in this period in order to make people say, "The President has spoken, the currency has dropped", someone should come out and explain this.


The third issue is that although the new decisions announced will affect the exchange rate to some extent in the short term, they will increase the liabilities of the Treasury and the Central Bank extraordinarily. This deposit guarantee method announced will increase the public burden and increase the Treasury's debt. I know our citizens are confused. Because there is a very dangerous game in the middle.

'All money is indexed to foreign currency'

You know, in recent weeks, more than 60 percent of the total deposits in banks were foreign currency deposits. With the decision taken last night, the way was opened for the return of the remaining deposits, namely TL deposits, to be equal to the increase in foreign exchange. This is a complete dollarization of the country's economy. This practice ultimately nullifies the effect of monetary policies. By indexing the Turkish lira deposits, which have already fallen to 35-40 percent, to foreign currency, it means that all the money in the bank is no longer Turkish lira, but foreign currency or foreign currency indexed currencies.

'Increasing interest without putting name'

These are the politics of the unstable, poor Turkey of the past. In the 1970s, there were many Hacı Murats on the roads. Born in the eighties, Falcons used to roam the roads. And you would get in line, you would deposit your money a year ago, you would buy the car a year later. The decisions announced yesterday are to take Turkey back to the era of the Hacı Murats, Şahins and Doğans, nothing else. They package it and present it as a good thing. In fact, what has been explained is nothing but taking the country back to the times when the Doğan-looking Şahin was sold. These announced decisions are an implicit interest rate hike. Increasing interest without mentioning it… They do not correct the essence of the matter. They are trying to right a wrong with another wrong.

'Decision that disrupts income distribution'


The interest received by the Central Bank was reduced with the instruction, the interest paid by the Treasury was increased by exactly 8 points, a covert interest rate increase was made by guaranteeing the exchange rate jump on deposits, and all the currency risk that would arise was put on the Treasury's back. This is the clearest form of working with the interest lobby, in their own words. These are the decisions that distort the income distribution and increase inequality. Those who will benefit from this, have deposits in the bank; people with high incomes. While our low-income and fixed-income citizens, especially our employees, farmers and shopkeepers, pay the bill for these decisions, a small number of high-income people will benefit from the results of the decisions.

'We have entered a period of high inflation'

Erdogan's actions are dragging the economy of this country into a complete quagmire. For 34 years, inflation in this country was double or triple digits. In other words, the inflation period is a period in which both prices and salaries inflate, but in essence the purchasing power decreases. It is a period in which the country is constantly impoverished. Right now, Turkey has entered a period of chronic high inflation. Does the dollar rate zigzag eight up and five down in a country? There is no example in the world of what we have experienced in the last month. They left no such thing as stability in the country. If your own money is strong, if your economy is strong, this will not happen.”

 

Nilgiri

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Government bond rate (yield) is based on trading, Erdogan doesnt have power to determine the bond yield. It is more like auction (open market trading).

Yield is essentially interest rate in reverse direction (since you are lending to govt bank).

The govt pays you (original bond holder) that extra each year and then face value back at maturity....agreed upon when it issued the bond.

The higher the bond rate, the more it can sell (and borrow) from market (for every risk level)....but also the higher the payment they have to give each year etc.

So it is a balance (generally have to offer more than the going inflation rate of the currency)

Be it lira bond or say USD or Euro Bond (Turkey was selling the latter....i.e foreign currency bonds at about 6 - 7% interest iirc earlier in year.... a cpl % points above EM world average for dollar bonds)

If govt says interest rate = usury and should be 0%....it would not participate in it in any direction (lend* out at interest or borrow at interest).

What you mention (market setting further yields) is more secondary market trading of already issued bonds.

Like I executed a trade earlier in year of buying long term bonds of country that have half their maturity date left....because the seller wanted to sell early and I deemed the risk stable and low and thus good return for me over time.

The subsequent trader contracts (to current final holder) just network/branch from the original buyer/holder generally in the vetted broker process of secondary market.

But govt only deals with what it agreed to pay in the original issuing to original buyer (normally large brokerage firms or mutual funds these days).

*govt bank does it in this direction when it issues base lend rate to other banks (public or private in the country) since it is sticker/carried interest of the currency be it fresh from print or in circulation already



But he could refuse selling bonds on international market. The real world doesn't listen his lies. The most important thing is he pays high interest rates to foreigner infidels while punishing own citizens with negative rates.
View attachment 37505
Here is the link of the most cheapest change office in Türkiye. They usually sold USD for little pennies and always have been profitable than others and Banks. All Turkish business buy USD from them.

Interesting thing is the difference between buy and sell is huge!!!!

Buy 13,40-Sell15.09

Currently Are Turkish Banks supplying profitable USD ?

Yeah that is known as spread....essentially a commision proxy....generally related to volatility and actual buffer size of the investment pool.
No one serious is going to invest in them with spread this high in a proven volatile (and "unconventional" driven) scenario on top.
Investors (small or mid like me....or much larger ones too) like low spread and stability.

Negative rate to citizen, i suppose you mean (savings) interest rate minus inflation?
....since locals can generally only buy lira bonds or save in long term account.

AFAIK, even the shorters (that borrowed by fronting risk earlier in year to sell bond/lira from what they thought would be the "high" to take gamble to buy them low later)...they've all lost their money and are staying away now for most part ....maybe a few got lucky (or had insider info) and timed it well with this recent announcement, but I venture very few....regular bulk had bad experience over 2021.

Those tend to be the lenders of last resort in EM market....Erdogan admin was really trying to make something fly with those dregs at bottom of barrel basically.

Anyway those shorters essentially made the gamble that Erdogan would reverse course on interest rate at some point of end-2021....and it didnt pan out.

At least thats what one EM fund manager (childhood buddy of mine in UK now) told me some weeks ago.

All the gimmicks from now till election time will thus be domestic money/loan/bond oriented (just like what was announced now) i.e local demand side propping up rather than try build foreign demand side....because foreign investor shenanigans are all over for most part....trust is gone.

i.e its deemed "Negative carry" + "pain trade" given even the shorters are disillusioned and wary.....since Erdogan is not giving up on his lower interest rate (while high inflation) crusade.
 
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Lool

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Iam not sure if the info I have is completely true but I did hear that Erdo said that only those who exchanged their money on the 20th or the 21st are eligible to be involved in the new economic plan

If such info is true, then Erdo has scammed us all. He just lowered the lira so that he can exchange some dollars!
Get ready everyone, the lira is getting ready to soar to 20 per dollar again in no time
 

Nilgiri

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Are you joking?

I thought the plan was lowering the TL and increasing the export... the "new Turkish Economical model". Another 180 degree move?

In local language where I am from, we tend to say something along lines of :

"some weathervanes are so close to politician rear and the gas/farts"... :LOL:

Honestly, decent+educated+rational members should just ignore one-liner weathervane spam-agitators.

They will be jumping for joy when TL depreciates later in 2022....becase exports stronk! again.

Then blame regular Turkish people again when the govt debt payments, taxes + inflation (to finance this saver insurance scheme) explode in 2023 onwards to add to whats already there now.
 

Xenon54

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Truly never a dull moment in Turkey
The whole world may be stagnating but something must always happen in Turkey

I never in my life saw a currency swing like this in just a month. Hell, even bitcoin doesnt stand a chance
In this month alone, From an exchange of 10 liras to a dollar then to 18 then to 11 then to 14 and finally stabilised for 12 by the end of the day
Forex traders, especially those who longed in this pair, lost a bloody fortune
Volatility is at it max


Erdo's new model is way too risky though
If everything went fine and Turkey's current account stayed as a surplus till the end of the next year, then the Treasury is saved and Erdo one way or another prevent the dollarisation trend. However, if just one massive screw up occurs, Erdo and the treasury are bloody screwed and we can finally say..... good morning to super hyperinflation

IDK if Erdo has Guts and is trying to break to the dollar dominance or he is just outright crazy


And then you have this in Turkey 👇👇; this even made me question my sanity, lool
Truly fun, Will keep an eye on future events taking place

Yeah, the sharp drop to two week ago...

1640121875714.png


These people dont even know what they celebrate, there is a Tukish saying ''for the crazy every day is holiday (worth celebrating)''
 
T

Turko

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Yield is essentially interest rate in reverse direction (since you are lending to govt bank).

The govt pays you (original bond holder) that extra each year and then face value back at maturity....agreed upon when it issued the bond.

The higher the bond rate, the more it can sell (and borrow) from market (for every risk level)....but also the higher the payment they have to give each year etc.

So it is a balance (generally have to offer more than the going inflation rate of the currency)

Be it lira bond or say USD or Euro Bond (Turkey was selling the latter....i.e foreign currency bonds at about 6 - 7% interest iirc earlier in year.... a cpl % points above EM world average for dollar bonds)

If govt says interest rate = usury and should be 0%....it would not participate in it in any direction (lend* out at interest or borrow at interest).

What you mention (market setting further yields) is more secondary market trading of already issued bonds.

Like I executed a trade earlier in year of buying long term bonds of country that have half their maturity date left....because the seller wanted to sell early and I deemed the risk stable and low and thus good return for me over time.

The subsequent trader contracts (to current final holder) just network/branch from the original buyer/holder generally in the vetted broker process of secondary market.

But govt only deals with what it agreed to pay in the original issuing to original buyer (normally large brokerage firms or mutual funds these days).

*govt bank does it in this direction when it issues base lend rate to other banks (public or private in the country) since it is sticker/carried interest of the currency be it fresh from print or in circulation already





Yeah that is known as spread....essentially a commision proxy....generally related to volatility and actual buffer size of the investment pool.
No one serious is going to invest in them with spread this high in a proven volatile (and "unconventional" driven) scenario on top.
Investors (small or mid like me....or much larger ones too) like low spread and stability.

Negative rate to citizen, i suppose you mean (savings) interest rate minus inflation?
....since locals can generally only buy lira bonds or save in long term account.

AFAIK, even the shorters (that borrowed by fronting risk earlier in year to sell bond/lira from what they thought would be the "high" to take gamble to buy them low later)...they've all lost their money and are staying away now for most part ....maybe a few got lucky (or had insider info) and timed it well with this recent announcement, but I venture very few....regular bulk had bad experience over 2021.

Those tend to be the lenders of last resort in EM market....Erdogan admin was really trying to make something fly with those dregs at bottom of barrel basically.

Anyway those shorters essentially made the gamble that Erdogan would reverse course on interest rate at some point of end-2021....and it didnt pan out.

At least thats what one EM fund manager (childhood buddy of mine in UK now) told me some weeks ago.

All the gimmicks from now till election time will thus be domestic money/loan/bond oriented (just like what was announced now) i.e local demand side propping up rather than try build foreign demand side....because foreign investor shenanigans are all over for most part....trust is gone.

i.e its deemed "Negative carry" + "pain trade" given even the shorters are disillusioned and wary.....since Erdogan is not giving up on his lower interest rate (while high inflation) crusade.
Dear 2 days ago ordinary Turkish people who were scared just scrambled to buy USD for 18 TL. There weren't any gamblers or shorters. Poor citizens just didn't want to lose more in TL.

Will government compensate their losts as they kept trusting TL until 1 USD 18TL?
Erdoğan had better give compensation to losers of 19th December.

Yesterday action of government must be investigated. Was there a manipulation? Who sold one billion USD two days ago and who knew exchange rate would drop?


IMG_20211221_230833.jpg

IMG_20211221_230927.jpg
 

Nilgiri

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Dear 2 days ago ordinary Turkish people who were scared just scrambled to buy USD for 18 TL. There weren't any gamblers or shorters. Poor citizens just didn't want to lose more in TL.

Of course 99% have no insider info (thats true worldwide) at all. Regular saving deposit folks and small investors and retirement fund etc....they are the modern day serfs the corrupt leverage their schemes off and exploit.

It gets worse generally in developing world where institutional protection is minimal to begin with (in application) and not independent enough anyway (i.e tends to be taken over by whomever has the immediate power at the time).

For the 1%...even there only some small % have insider info (of this kind) to short to make a big gain across the spike....since the spike has to fall inside the short interval.

That depends on your closeness/connection to ppl making and timing the decision.

Closer you are, the likelier you are to have such info. It is guaranteed they are there (even in developed countries)....all that varies from country to country is how many involved and how protected they are....and what kind of "vetted" laundering they have established with the political patronage.

Some (out of the loop) people in 1% also get really lucky like roulette wheel, lotto, or coin slot too. It is a very small % but its there.



Yesterday action of government must be investigated.

By who?...and when? (given you need real time data analysis before it all gets cold/converted/stashed and then statute of limitations etc)

Which institutions in Turkey are robust and independent enough? Like say SEC in US....that looks at broad transaction volumes and analyses the data to get leads on insider info and irregularities (and then prioritise the bigger ones to investigate more).

This one you would simply start at key transaction volumes/markers (going against the mainstream signalling) leading up to the announcement....and the relevant transactions/conversions after it too.

But if such independent authority exists right now, I would think they would have already opened up some investigations in previous years on land real estate dealings and such....and all the other layers of banking bad loans and corrupt finance plaguing turkey leading up to this current apex of a mess.

There is systematic layering of this stuff over time when you have monolith power that is not hedged or directed rationally or well.

i.e long term institutional damage, and someone has to basically take over and clean shop afterwards and ensure it has as low chance as possible of happening again. It is tough process in developing world.
 

Nilgiri

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Investors (small or mid like me....or much larger ones too) like low spread and stability.

foreign investor shenanigans are all over for most part....trust is gone.

Good article to read on the matter, covers lot of the points we have mentioned:


Basically Turkish export-corporate Eurobonds is the only thing worth retaining/ investing in (as foreigner), since credit rating and outlook for those are separate (and in larger vetted backing i.e Euro and near purely export based) to say TCB bonds.

Larger govt/country is quite different matter/scale to those....and that is what is being ruined by the liability pressure of this new move to spread the damage of the interest rate foolishness (and not addressing/reversing it directly).

This gentleman (FT, Reuters and others often reach for comment) is good to follow on twitter too, its how I came across this article in his feed:

 

Ravenman

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Thousands of CHP 'makarnacilar' (leftist bourgoise, 'modern' white Turks with Bogazici University mentality, with nailpolish, against Erdogan) just changed their lira's to Dollars and Euro's when it was 20.

And now its 13.

🙃🙃🙃🙃🙃🙃
 
M

Manomed

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Thousands of CHP 'makarnacilar' (leftist bourgoise, 'modern' white Turks with Bogazici University mentality, with nailpolish, against Erdogan) just changed their lira's to Dollars and Euro's when it was 20.

And now its 13.

🙃🙃🙃🙃🙃🙃
Because they raised the Interest levels wasn't that against your arab religion?

Plus I made profits thanks to your allah

You akpions are seeing this as a victory you guys literally went against the will of almighty arab god thats not good.
 
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T

Turko

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'There is no such transaction volume'

Journalist İsmail Saymaz questioned the 1 Billion Dollars exchanged after the sudden drop of 3 TL in the dollar.


With the statements made by President Erdogan after the Cabinet Meeting yesterday, it was seen that the dollar, which was 18 TL, fell by 7 TL.

At midnight, Alpaslan Çakar, Chairman of the Board of the Banks Association of Turkey (TBB) and General Manager of Ziraat Bank, made a statement.

Çakar said, "There was a settlement of 1 Billion Dollars only through mobile banking from the internet".

Today, in a program attended by the General Manager of Türkiye İş Bankası, he made a statement as follows: "Yesterday, from evening to 10 am, 1.75 billion dollars of foreign currency was corrupted.

"WHO KNOW THAT THIS DECISION WAS MADE?"

Journalist İsmail Saymaz, on the other hand, made statements on this subject in Kadri Gürsel's program, where he was a guest on Halk TV today. Saymaz used the following statements while finding it strange that 1 Billion TL was exchanged in half an hour:

"President Erdoğan announced a decision as of yesterday. Who knew about this decision? Who knew that this decision would be taken? Who knew it would be implemented? Because as soon as it was announced, the dollar fell by 3 TL.

In this country, people do not exchange their money with banking transactions, but rather with a jeweler they trust, at a bank branch or exchange office.

How many people in Turkey at that hour can exchange 1 Billion Dollars in half an hour through banking transactions. An astonishing transaction size. An astonishing trading volume. It may sound mild when we say it.

But at that moment, the citizen who makes the shopping that will cause the dollar to drop by 3-4 TL in order to protect his savings cannot do it. That citizen already buys the dollar from the bank branch, buys it from the jewelry store, buys it from the exchange office or runs to the covered market.

Someone who did the banking transaction in large amounts did this. Someone did it and after the President's statement, they took care of it within 1-2 hours.

 

TheInsider

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There is one way to save the economy a sizeable interest hike. Cheap tricks aka hidden interest rate hikes won't cut it.
Thousands of CHP 'makarnacilar' (leftist bourgoise, 'modern' white Turks with Bogazici University mentality, with nailpolish, against Erdogan) just changed their lira's to Dollars and Euro's when it was 20.

And now its 13.

🙃🙃🙃🙃🙃🙃
That is not true. Most of the rich people switched their belongings from 4 to 7 range. And the last ones switched from 9-10. The last ones were always the usual folks on the street.
 

Xenon54

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T

Turko

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Erdogan: I was not there when the foreign exchange reserves of the Central Bank were falling, I was the President

😂


Explaining that the Central Bank's foreign exchange reserve was 27.5 billion dollars at that time, Erdoğan said, "During my prime ministry, we increased this foreign exchange reserve to 135 billion dollars. Later, there was a decrease, I was absent. I was the President."




Anyway he admits now we are worse position than 2002 as currents reserves minus 30billion USD.


"Ben yoktum"
 

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