Following an unexpected steep fall in interest rates by certain central banks in recent weeks, Turkey’s state-owned bank is likely to cut loan borrowing costs by roughly 200 basis points on Monday.
According to Reuters, three major public creditors, Ziraat Bank, Hulk Bank, and Bakif Bank, are set to lower interest rates on corporate, individual, and other loans. It is necessary to discuss it.
The lender sent an email to some staff being tested via Reuters on Friday informing them of plans to reduce spending by about 200 basis points. Another senior banker said the Kingdom’s banks would cut prices on Monday, especially to address the key factor that financial institutions would cut repo prices by 200 cents.
Cemil Ertem, the senior adviser to the Turkish president and director of Vakif Bank, said on Twitter that the Kingdom’s banks had reduced mortgage rates to hedge prices at major financial institutions.
Ziraat Bank did not call immediately. Halkbank declined to comment, and VakifBank spokespersons no longer responded to requests for information about the plan.
Policy easing by large financial institutions usually lowers borrowers’ interest rates and stimulates financial activity. But last week’s price readings were very surprising due to the highest moderate estimates in Reuters polls, dropping to 16% in a double-sharp market.
This lowered the lira against the dollar, raised benchmark yields, and retreated Turkish government bonds to 20.53% in 10-12 months.
Inflation risk
The kingdom’s big banks are expected to keep an eye out for key financial institutions, but last week’s reaction to the market shows that cheaper loans can cost them higher prices.
Also, temporary price declines can help some groups and consumers, but many analysts say it also poses a risk that exacerbates rising inflation and decline in lira, turning against key financial institutions. It may put pressure on you to walk and rise again.
The Turkish Wealth Fund of the authorities no longer mentions banks that reduce borrowing costs. Major financial institutions did not want to discuss their kingdom plans and feasible outcomes.
Many analysts have publicly stated that Turkish President Recep Tayyip Erdogan needs price cuts to improve credit value and exports, regardless of whether inflation has reached 20% in the last 20%.
States that the credibility of important financial institutions has been compromised. Last week, financial institutions said they would cut prices, partly because inflationary tensions were temporary.
Erdogan, the enemy of hobby prizes, has changed many of the management teams of major financial institutions in the last 12 months. Sure, Turkey is currently only lowering prices, but other major banks in the sector are pulling to deal with rising pressure on interest rates around the world.
‘RISK PERCEPTIONS’
State banks have been aggressively improving credit value over the past 12 months to mitigate the effects of the pandemic.
However, some individual creditors say they have doubts about the risks of the financial system, which is expected to grow by almost 10% in the last 12 months, and the possibility of defaulting foreign currency-denominated debt.
He said, “When a kingdom-run bank cuts prices and opens a consumer loan … Emre Peker, principal of the London-based Eurasia Group, said:
A major financial institution said in a statement Thursday that there was a business problem in obtaining a business loan due to the narrow coverage.
According to information from central financial institutions, the typical interest rate on these loans over the last 12 months has remained close to 20%, but one of the readjustments is between 17.5% and 18% for Kingdom banks. It is shown to be. These prices are one of the prices that banks are expected to fall on Monday due to three readjustments.
Thursday’s rate cut will be the second in a few months with the help of key financial institutions, following a 100-factor cut in September. By providing policy easing, Lira hit a low of 9 in early September, falling 13% against the dollar and improving import inflation.
The kingdom’s major banks are expected to offer important financial institutions, but last week’s market reaction suggests that offering cheap loans can be expensive for them.
Also, while temporary price declines should help some groups and consumers, many analysts soon oppose large financial institutions, with the risk of rising inflation and worsening lilac depreciation. It states that it may push back in the direction.
Many analysts are important with the help of Turkish President Recep Tayyip Erdogan publicly stating that price cuts are needed to improve credit scores and exports despite rising inflation last month.
It states that the credibility of financial institutions has been compromised. Governor Sahap Kavcioglu has publicly stated that Turkey’s major financial institutions have independent coverage.
Last week, financial institutions said they would lower prices for parts because inflationary tensions were temporary.
Foreign buyers reportedly returned to Turkey’s bond market earlier this year, but many are very skeptical about their outlook for one of the world’s largest bull markets.
This week’s sale of $ 2.25 billion worth of Turkish dollar bonds attracted active demand from UK, US, and European buyers and signalled the situation in the US today. NS begins seducing low-funded managers with exorbitant returns that prove elusive in many different markets.
“Some buyers tend to stay calm despite all the dangers,” said Timothy Ash of Blue Bay Asset Management.
“We had a few months of relative stability in the forex market, ‘carry’ is overkill. We were in a poorly performing world. ”
However, some fund managers had little desire to direct back pain. During the relatively stable months, Turkish real estate has made a positive contribution to the returns of the generally growing real estate market. Thus, fund managers who invest much less in Turkey than their own weight are below the benchmark.
Those who have to aggressively short Turkish currencies or borrowed bonds in the desire to lower rates buy them at a reasonable price and make a distinction in their pockets, ongoing transactions, visible.
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