Macro and Politics
Tacirler Investment
* The CBT will release December short-term external debt stock figures @ 10:00 local time. Short-term external debt stock in November materialized at USD178.8bn, down by 0.8% m/m. In terms of short-term debt statistics, we believe that “debt stock on a remaining maturity basis,” calculated based on the external debt maturing within one year or less regarding the original maturity, is rather critical, which is at USD232.7bn as of November 2024. Out of this figure, USD23.8bn is debt to the resident banks and private sectors to the banks’ branches and affiliates abroad. Stripping this amount from the total results in USD208.9bn. We also add 12-month forward-looking CAD expectations on this amount so as to reach Turkey’s annual external financing need (EFN). Accordingly, we calculate EFN as of November 2024 around USD230bn.
*The Residential Property Price Index (RPPI) registered a monthly rise of 4.7% and an annual increase of 32% in February, reaching a level of 165.9. Yet, in real terms, RPPI dropped by 7.1% y/y. We would like to highlight that while the annual real depreciation in housing prices has persisted since February 2024, the 7.1% annual decrease observed in January marked the most moderate contraction since March, with the pace of annual decline slowing since October. Despite persistently high mortgage rates, the sharp annual increase in mortgage-backed home sales appears to be driven by expectations that housing prices, which have been declining in real terms since February 2024, will rise in the coming period.
* The Treasury tapped the domestic markets at an amount of TL69.2bn (including non-competitive sales) through yesterday’s 3y CPI-linked and 5y fixed coupon bond auctions and finalized its domestic borrowing program for February. Accordingly, the Treasury’s domestic borrowing since the beginning of the month totaled TL241.4bn, above the initial projection of TL180.1bn. The Treasury will release its next three-month (March – May 25’) domestic borrowing strategy on February 28th @ 17:30 local time. According to the previous program (February – April 25’), the Treasury has a domestic redemption of TL111.3bn in March, while in return plans to borrow TL179.5bn throughout the month.