Ishbank General Manager Adnan Bali, “50 percent of foreign exchange purchases were made between 7.05-6.75. Real people started selling foreign currency after November. There is a decrease in foreign currency deposits, albeit limited.” explained.
Bali, Gokhan Shen’s assessments of the economy in Bloomberg HT found. Asked about the demand for currency, Bali said that individuals began selling currency after November. Stating that there was an effective demand for foreign exchange from the system before November, Bali said that now there is an entry of 10 million dollars a day. Stating that there was a limited reduction in DTHs, Bali noted that half of the purchases were made between 6.75 and 7.05 and that they were not in favor of interest.
Bali, “I don’t think interest is a magic tool to solve all the problems on our own, based on the rigidity of money. In fact, it has enough side effects. There is an idea that we want to be interested in, but not at all, we pay interest.“he said.
Bali went on to say:
“Deposits make up 64% of our sources. It takes time for these costs to be reflected in loans. There is no conflict of interest between bankers and industrialists on this issue. I compared the interest to chemotherapy. I wish we could work with financial stability, even if we don’t need to buy. This is our main scenario for interest. There is a slightly strengthening inflation trend this year. After crossing the 100-150 base point in the second quarter, I think it should return in the second half of the year with the effects of a tightening of the currency and a lower exchange rate, and this will pave the way for interest rate cuts.
We must be tolerant in these matters. This will be our main scenario if we see a change in expectations in the pandemic, reverse dollarization, the process of accumulating reserves and a controlled recovery with the return of inflation. Ensuring financial stability is important for everyone. Of course, there is a political part to this. But the political part of the matter has nothing to do with us. Although credit and deposit prices contradict the balance sheet terms, we must adjust them to the monetary tightness. We stated this in our consultations with the President of the CBT Naci Agbal. There is a need for a controlled exchange rate in the types of loans that will increase inflation. There is a horizontal position in loans. This also serves a purpose.
There was a $ 30 billion expansion in foreign currency deposits last year. But there is a limited setback, not to mention reverse dollarization. In the first 10 months of the year, $ 13.4 billion was deducted last year. The share of foreigners fell to 3 percent in September 2020. Here we are watching the recovery situation. As of the week of February 12, it has $ 4.8 billion in net-exchange earnings. We see that the risk premiums fall to 280-290 base points. That is, these policies are paying off. We should not expect this to happen immediately. Total reserves are at their highest level since March last year. But net resources must also be supported here. In 12 months, it has about $ 190 billion in foreign currency debt to be repaid. Of this, $ 75 billion belongs to the bank. The real open position of the real sector is around $ 158 billion. The real sector has also reduced its foreign exchange debt.
The PMI is moving above the 50 threshold level. We estimate that growth will be about 2 percent in 2020. We entered quickly this year, but we should expect it to decrease slightly in the second quarter. This is also a healthy thing. We forecast 3.5 percent growth for the whole year. In 2020, Turkey will be one of the few countries to grow in the epidemic. If we apply the base scenario I mentioned, I do not see the real sector as a problem. I have seen many crises, we can manage them. But the important thing is to keep the work environment healthy and not to go beyond the principles of a free market. We could not provide a confident picture in our contacts with foreigners, let’s be realistic. As Turkey, we have some international disagreements, these are not problems. Turkey must have a choice and a price. But there are some mistakes we make. When all this picture came together, a problematic picture emerged. The Turkish economy has a dynamism that will recover. The pandemic took the opportunity to rectify these processes.
Therefore, the process of vaccination and recovery from the pandemic will be very important in this regard. In the past, we had many characteristics that protected us. We had less risk rewards than the risk rewards required by our rating. We are affected by discounted global crises. Four things ensured it: financial discipline, EU-defined debt-to-GDP management, single-digit inflation, and a sound banking system. We need to correct some of the damage caused by these four elements. Here is the solution. “