The Turkish economy has been preoccupied with debates over economic models and the policies of the new economic management in recent times. The "low interest, low inflation" policy led by President Recep Tayyip Erdoğan, which is being attempted to be ended by the duo Mehmet Şimşek and Hafize Gaye Erkan appointed after the elections, has raised questions about the anticipated measures and tightening policies, creating uncertainties in the markets. The promises of the new economic management for a "return to a rational ground" will significantly impact the future of the Turkish economy. #TCMB #CBRT
Changes in Interest Rate Policies:
The recent interest rate hike has brought criticisms that the new economic management is not yet acting entirely independently. However, among foreign investors, there are also those who view gradual and controlled interest rate increases positively. Nick Eisinger, the Manager of Vanguard's Emerging Markets Fixed Income Fund, emphasizes that Turkey should carefully monitor economic pressures and avoid balance of payments issues, stating that interest rate policies are of critical importance.
Economic Slowdown and Investor Sentiment:
Liam Peach, Senior Emerging Markets Economist at Capital Economics, states that the new economic management aims to avoid economic stagnation and that interest rate increases are supported by investors. Paul McNamara, Investment Director at GAM Investments, notes an increased positive outlook towards Turkey amid the slowdown in credit growth. Investors closely monitor the measures to prevent economic stagnation.
Foreign Investors' Reserves and Investment Expectations:
Foreign investors welcome the Turkish Central Bank's decision to stop intervening in the dollar/TL exchange rate. The $50 billion investment agreed during President Erdoğan's Gulf visit is on Turkey's agenda. However, investors still lack clear information about how and under what conditions this investment will enter Turkey. #centralbank
In Summary:
The changes in the Turkish economy and the policies of the new economic management are closely monitored in the markets and have captured the attention of investors. Changes in interest rate policies, efforts to avoid economic stagnation, and foreign investors' reserve and investment expectations hold significant importance for the country's economic trajectory. The measures taken and economic developments in the upcoming period will be decisive for Turkey's economic future. #turkey