Have you noticed the change in the price tags?
Güven Sak, PhD
18 March 2011
The new and fast growing trend among publishers to print the prices on the back cover again is evidence of the fact that Turkey is rapidly losing its inflationist memory. I love browsing through books at bookstores whenever I have time. My main interest is the books, actually. But since the beginning of this year I have been noticing a change. They no longer attach price tags to the books as we got used to in the long inflationist period. Since the beginning of 2011, publishers print the price of the book directly on the back cover. Are you aware of what an important change this is? This, indeed, can be read as an indicator of the fact that many parameters including the maturity of bank deposits are about the change. Let me tell you why.
[More]
Finally
Fatih Özatay, PhD
17 March 2011
If the CBT had done the statement on Tuesday right after the debates had emerged, it would strengthen its prestige. I had omitted the last two paragraphs of my commentary on Tuesday to use it in today's commentary due to constraints about space. My commentary on Tuesday ended as follows: "Now it is time to examine the declarations of the CBT about the steps taken to discourage short term capital inflows and the dissuasiveness of the decisions. I will deal with this in the next commentary..." I was talking about the Central Bank of Turkey (CBT). And the part I had to omit (in brief): "...The rest of the decisions were aimed at enabling a healthier method of finance for the current account deficit that currently stands at high levels. The Bank has initiated a number of measures supposed to d
[More]
Breaking the routine, dilemma and failing to justify
Fatih Özatay, PhD
15 March 2011
If the BRSA steps in and introduces regulations that will discourage extending credits using short term funds, the CBT's chances to succeed with the new policy framework will be increased. I have written a number of commentaries on the latest decisions of the Central Bank of Turkey (CBT). I want to wrap up my comments so far. Today I want to stress three important points about the series of decisions of the CBT to increase the required reserve ratio with the aim to slowdown the rapid rise in the credit volume.
[More]
I sincerely congratulate Mr. Recep Akdağ
Güven Sak, PhD
15 March 2011
I am of the opinion that the demonstrations could have been more comprehensive. The arbitrary decisions of the Ministry of Health in the recent period have harmed the private hospitals in particular. I had not participated in a protest in years until the other day when I joined the Many Voices, One Heart demonstration held in Ankara by the health personnel. The weather was quite good on Sunday. It was a long walk for me. I saw many friends I had not seen in a long time. I had a lot of fun. I would like to thank to Mr. Recep Akdağ, Minister of Health, for giving me this opportunity. Today let me share with you my impressions about the day of protest.
[More]
What do the credit data tell?
Fatih Özatay, PhD
12 March 2011
Credit supply can be slowed down should the required reserve ratio is increased "sufficiently". The fact that such slowdown is not yet observed as shown above does not change the reality. The Central Bank of Turkey (CBT) had increased the required reserve ratio for TL deposits with four consecutive decisions, first of which was made in September 23. The declarations of the CBT reveal that the aim of the actions was to slowdown the rapid increase in the credit volume by raising the amount of funds banks are obliged to keep at the CBT. The CBT has highlighted severally that this was required for the sake of financial stability.
[More]
The highest rank in the Libyan army is colonel
Güven Sak, PhD
11 March 2011
If the European Union had acquired a similar insight and executed the accession process without any interruption, Turkey most likely would not have needed the Ergenekon case. Recently I read that the Chief of Staff of the Military of Libya was Colonel Abu-Bakr Yunis Jaber, which made me wonder whether there are no higher-ranking officials in the military in Libya. I checked this and saw that the rank of general has not been used in the country since the military coup of 1969. Can you imagine the trauma Libya has been going through? Let us imagine it together.
[More]
How can the Central Bank overcome the “dilemma”?
Fatih Özatay, PhD
10 March 2011
While withdrawal of 21.6 billion liras was targeted, the CBT injected 14.7 billion liras to the market. The Central Bank of Turkey (CBT) increased the required reserve ratio not only by the decision taken on January 24, 2011. Decisions to this end were taken occasionally since April 2010. The first one was about the required reserve ratio imposed on foreign exchange denominated deposits. That imposed on the lira deposits was raised for all maturities for the first time in September 23, 2010. Later on November 12, 2010 the ratio was raised again for all maturities. It was declared that the impact of these two decisions would be a net exit of money of 4.2 billion liras.
[More]
No wise man has been entering the industrial sector, indeed
Güven Sak, PhD
08 March 2011
Turkey needs an industrial policy. Deindustrialization is Turkey's biggest problem. If I were to ask you what the biggest gain of the eighty-odd-year history of the Republic of Turkey has been, you probably would have a number of answers. If you ask me, the biggest gain in the Republican era was becoming an industrial economy. The combination of the answers that came to your mind in response to my question has enabled Turkey to become an industrial country. However, the circumstances are worse now. Turkey has been going through a process of deindustrialization for the last five or six years. The reason is that Turkey does not have a vigorous economic policy framework. Above I said that "no wise man enters the industrial sector." With your leave, let me say that no one with any sense has e
[More]
On the Central Bank’s dilemma
Fatih Özatay, PhD
08 March 2011
The CBT on the one hand reduced the amount of funds banks can extend in form of credits and on the other hand provided one-week maturity funds to them in order to maintain the weekly repurchase rate at the identified level.
[More]
Inflation rate: heads to where?
Fatih Özatay, PhD
05 March 2011
Together with the rise in crude oil and food prices, the possibility of an upwards movement in inflation rate becomes more visible. Consumer price indices have been issued since January 1964 though under different names. I broadly reviewed the year-on-year change in the price index for each month: 4.2 percent inflation rate announced for February 2011 is the lowest inflation rate since mid-1970s.
[More]
