May 29, 2023
Currency assessment from TEB Currency assessment from TEB

Currency assessment from TEB

Turkish Economy Bank (TEB) General Manager Ümit Leblebici said that he insisted on the tight monetary policy followed by the Central Bank to suppress inflation and said, “This determined stance has enabled the pricing in the banking sector to be made accordingly.

ISTANBUL (İGFA) – TEB General Manager Ümit Leblebici said that the Central Bank guided the banking sector in the fight against inflation, and according to the emphasis on implementing a tight monetary policy until it reduces inflation permanently. He stated that he adapted himself to this stance. Leblebici said, “As the real sector believed that inflation would go up continuously, they were constantly increasing prices. If you say that you have a really tight monetary policy and you start pricing because the price increase will not go up continuously, but will start to go down after a certain point, this also changes. The same is true in the banking sector. There is a big difference between the sector pricing because the interest rates come down after a certain point and pricing because the prices do not come down for a long time. The sector is constantly adapting itself according to the Central Bank’s statements. ”


The system funds itself through the Central Bank, and the money transfer mechanism is fine. Stating that it works well, Leblebici said, “When we look at the total of open market operations today, there is a banking system that funds only 280 billion lira (excluding SWAPs) from the Central Bank. Each newly priced deposit goes up at every level. Today, we started to see prices above the Central Bank funding. I think this will continue in the long run. Because the Central Bank insistently says that it will not give up this monetary policy without seeing the price level and inflation break. The banking sector started to pick up its prices. This is an indicator that we are in a permanent tight monetary policy in the long term. ”

Underlining that they do not expect a decrease in interest rates, Leblebici said,“ Industrial production is alive and commodity markets are moving upwards. With the opening up of the service sector, there will be an inflationary pressure. Therefore, an interest rate cut in the short term may put the sector at risk. “We may need to go above the interest we are in in the long term.”


Speaking about the currency prices, which the market is most curious about, Ümit Leblebici said that they do not expect similar increases in the dollar exceeding 8.5 last year. Leblebici continued as follows: “Unfortunately, there was an uninterrupted exchange rate increase from 5.5 to 8.5 in 2020. Therefore, forecasts of 8.5 are made with the prediction that this trend will continue. This doesn’t seem very right to me. Anyway, the 8.5 level experienced last year was above the normal level. Currency is also a means of savings. However, the environment where you can protect savings is on the interest side today. Today, there are deposit rates of 17-18 percent, close to the Central Bank rate. When you look at with withholding effects, you have an almost net income. ”


Emphasizing that citizens are gradually changing their foreign exchange, TEB General Manager Leblebici said,“ The exchange rate has decreased. It’s been three months since. The expectation of whether the currency will rise started to be broken. As the savers see that the tight monetary policy is applied decisively, they will make their choice in favor of TL. We have already started to see this trend. There is a similar trend in corporate firms. ” he spoke. Underlining that there are also effective inflows to banks, Leblebici informed that currency exchange moves have started on the part of institutions. Leblebici said, “Institutions had their own debt structures. They had self-hedging mechanisms for foreign exchange borrowings. As they saw that the exchange rate stabilized more, they stopped buying foreign currency and started exchanging it ”.


Stating that they do not expect a significant slackening in credit costs, Leblebici said, “If we grow according to our estimation, even if we do nothing in 2021, it will be 4- percent. There appears to be 4.5 growth. If credit growth continues at a rapid pace, this could go to a place we can’t control. That’s why the Central Bank is doing a very good job. It is trying to combine the years 2020 and 2021 and enter the speed limit. This is what needs to be done. This is done for sustainable growth. We have to look at this. There is a need for balancing. If you grow too fast this year, you will have to shrink next year. Therefore, you need to maintain a softer growth ”.


Stating that the credit provided in the system is more than the deposits collected, Leblebici said that nearly 1.5 billion lira deposits were collected in the system, and nearly 2.3 billion lira of credit He said he was given. Leblebici said, “Since the beginning of the year, there has been no growth in credit, on the contrary, there is a 1-2 percent decrease. Loan growth comes in, but I don’t think there will be any drastic growth. The possibility of approaching inflation levels does not seem possible to me. There was a lot of loan demand in 2020, this situation returned to 2021 as less loan demand. Therefore, I do not think that loans are likely to grow as much as last year. ” He spoke in the form. Stressing that the real sector balance sheets are better than last year, Leblebici said, “The real sector has adjusted itself. Industrial production is strong. Today there is strong industrial production in white and brown goods. The sector most affected by the tourism epidemic, but we also think that 2020 will improve more than twice this year ”.

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