Citi Announced that CBRT's Last Steps Will Support TL

Citi Announced that CBRT's Last Steps Will Support TL Citi announced that CBRT's last steps will support TL. The organization has released a report on Turkey's economy. On a report Citi released on Turkey's economy, it was stated that interest to the developing countries and the recent steps taken by the Central Bank of the Republic of Turkey (CBRT) will support Turkish assets in the short term. In the report called '5 basic questions for 2021', the institution stated 5 questions that will determine the performance of Turkish assets in 2021 should be answered, "What is next after the recovery supported by incentives? Is the worst in inflation behind? What's next in goals and policies, how will international reserves be replaced?” were among the questions. In the said report, it was stated that Turkey's economy recover faster than expected after the shock of the pandemic but was at some costs. The report included the following statements: “The expansionary policy stance and strong loan growth supported domestic demand, while the excess TL liquidity caused a large loss in international reserves and a sharp increase in dollarization. In addition, the deterioration in the internal and external balance resulted in the new economic management taking some positive steps to restore macroeconomic stability.” Citi predicts that investors' optimistic behavior towards Turkish assets will continue in the short term, “The increase in interest in developing country assets and the simplification policy of the Central Bank with the increase in interest rates will support the Turkish lira and the bond market in the short term.” Unless there is a change in policies from the demand management to the supply side, the report stated that it is difficult to catch up with the growth performance before 2018, following statements took place; “If the significant decrease in the risk premium does not continue in the first half of the year, our inflation indicators show that the Central Bank may need to tighten more.” The following statements were used about the reserve: “We think the Central Bank will monitor the capital flows and dollarization process before establishing a rule-based mechanism.”