Macro and Politics

* The short-term external debt stock in September materialized at USD165.8bn, down by 1.9% 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 1 year or less regarding the original maturity, is rather critical, which is at USD224.8bn as of September 2025. Of this total, USD26.9bn is attributed to loans taken by resident banks and private sector affiliates from their branches and affiliates abroad. Stripping this amount from the total results in USD197.9bn. 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 September 2025 around USD223bn.

* The Residential Property Price Index (RPPI) rose by 1.6% m/m and 31.6% y/y in October, reaching 198.8, while prices dropped by 1% y/y in real terms. Although the annual real contraction in house prices has persisted uninterruptedly since February 2024, the pace of the decline has moderated, stabilizing within the 1% – 1.5% range over the past five months. A closer look at the regional breakdown shows that, in October, house prices increased by 2.7% m/m in Istanbul, 1% in Ankara and 1.8% in Izmir, with corresponding annual gains of 32.4%, 38.4% and 30.7%, respectively. Ankara recorded the highest annual price increase at 38.4%, while the Aydın, Denizli and Muğla region posted the lowest at 23.1%. On the financing side, the average mortgage rate declined from 38.8% in September to 37.9% in October, compared to 41.5% in the same period of 2024. Overall, the data suggest that the prolonged weakness in real house price dynamics is gradually fading, with annual real price changes likely to move towards positive territory in the near term.

* The Treasury sold TL17.8bn at yesterday’s direct sale of a two-year TLREFK-indexed lease certificate. Accordingly, the Treasury’s total domestic borrowing since the beginning of the month has now reached TL99.4bn. After yesterday’s single sale, the Treasury will hold the direct sales of a 2y USD-denominated bond and a 2y USD-denominated lease certificate tomorrow and finalize its domestic borrowing program for November. According to the Treasury’s three-month domestic borrowing program covering the period of November 2025 – January 2026, it plans to borrow a total of TL128.3bn from domestic markets against its redemption of TL95bn this month, implying a rollover ratio of 135%. Having already raised a total of TL99.4bn from the domestic markets so far since the beginning of the month, the Treasury is likely to borrow around TL30bn via tomorrow’s direct sales.