Bloomberg Intelligence calculated the possible impact of the interest rate and the exchange rate on Turkish banks
Bloomberg Intelligence evaluated the effects of the new economic management on banks.
In the report, the recent depreciation of TL by more than 15 percent was predicted to affect Turkish banks. It was indicated that the capital adequacy ratio of the four large national banks may decrease by 65 basis points due to the increase in the exchange rate. It was also claimed that the probability of TL depreciation increased.
The increase in bond rates is forecast to cause a 200 billion lira loss for banks with large amounts of government bonds in their portfolios, and this may cause a 200 basis point decline in the sufficiency ratio capital of banks to 15 percent.
THE BANKS ARE NOT OLIENT TO THE CRISIS
While the report emphasized that the crisis management skills of Turkish banks will be put to the test this year, it was emphasized that the banks were not familiar with interest-based shock therapies, referring to the 2018 crisis.
On the other hand, according to the institution’s analysts, it was stated that although the market prefers a rapid return to orthodox policies, growth and employment may continue to be a priority for the government. Bloomberg Economics revised its policy rate expectation for the end of 2023 to 24 percent.
However, it was stated that the pace of monetary policy tightening and a return to orthodox policy are essential to restore confidence and predictability in order to control inflation.
Source: Sozcu
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
