The USD/TL exchange rate is set to close the week with a 0.65 percent increase. The exchange rate starts the last day of the week at 33.55 TL. The Euro starts at 36.64 TL.
The Central Bank of the Republic of Turkey (TCMB) announced the 3rd Inflation Report of 2024 yesterday. The TCMB did not change its 2024 and 2025 inflation forecasts and once again emphasized tight monetary policy. Governor Fatih Karahan began the presentation with the words, “Our determined stance on monetary policy has not changed.” Karahan said, “As a result of our tight monetary policy stance, the slowdown in credit growth has become evident recently.” Karahan emphasized that the disinflation process has begun.
Karahan said that the slowdown in loans became evident due to the effect of tight monetary policy.
Fund manager Timothy Ash, who evaluated the report, said, “A mega-impressive presentation followed by a Q&A. It’s like night and day progress compared to the previous administration. TCMB is returning as one of the most reliable central banks in EM.” Economists said the emphasis on tight monetary policy was positive.
Karahan said that the tight monetary policy process had a positive impact on reserves. The reserve figures announced yesterday showed a limited increase. The total reserves of the Central Bank of the Republic of Turkey (TCMB) increased by $2 billion 375 million compared to the previous week in the week of August 2, reaching $150 billion 386 million. Gold reserves increased by $1 billion 791 million from $56 billion 104 million to $57 billion 895 million.
KKM experienced its biggest weekly decrease. KKM accounts melted by 68 billion TL in the week ending August 2. Treasury and Finance Minister Mehmet Şimşek, who evaluated the figures, said, “We expect the outflow from KKM, which has accelerated recently, to continue.” Reminding that the tax advantage in KKM accounts has ended, Minister Şimşek said, “The KKM stock, which was 3.4 trillion TL a year ago, has decreased by 1.6 trillion TL, declining continuously for 50 weeks.”
Global markets have weathered the major turmoil experienced at the beginning of the week. Reassuring statements continue to come from Fed officials. Finally, Fed Kansas City Governor Jeff Schmid said he is confident that inflation will move toward 2 percent.
