Macro and Politics

* TURKSTAT will release March Consumer Confidence Index @ 10:00 local time. The consumer confidence index rose to 85.7 in February from 83.7 in the previous month. Please recall that the index had averaged 83.9 in 3Q25 and remained broadly unchanged at 84 on average in 4Q25, pointing to a prolonged period of subdued sentiment toward year-end. A breakdown of the February data shows that the index tracking financial situation of household at present increased from 68.2 to 71.3, while expectations for financial situation expectation of household over the next 12 months strengthened more visibly, rising from 83.3 to 86.8. By contrast, general economic situation expectation over the next 12 months edged down marginally, from 81.5 to 81.4. Importantly for the domestic demand outlook, the index measuring assessment on spending money on durable goods over the next 12 months climbed further, from 101.9 to 103.2. Overall, the February uptick in consumer confidence suggests a gradual improvement in household expectations. However, amid the intensifying geopolitical risk environment and elevated uncertainty, we assess that the increase observed in the headline index last month may reverse as of March. The implications of the escalating US–Iran tensions for consumer confidence will become clearer with the release of the March data.

* The CBT will release weekly portfolio flows and money & banking statistics for the period of March 6 – 13 @14:30 local time. Due to the holiday schedule, the CBT’s weekly portfolio flows and and money & banking stats will be released on Monday this week. To recall the data from the previous week: Foreign investors recorded net sales of USD755.6mn in equities and USD1.7bn in the bond market (excluding repo transactions) during the week of 27 February – 6 March. As a result, foreign outflows from the bond market extended into a third consecutive week, with the foreign share in the total government bond stock declining from 8.9% to 8.1%. In the equity market, meanwhile, net foreign outflows were observed last week following thirteen consecutive weeks of inflows. Following the US – Iran tensions, risk appetite toward emerging market assets appears to have weakened. In this environment, we expect portfolio flows from foreign investors to remain subdued in the near term. Moreover, the residents’ FX deposits increased by USD294mn (excluding gold, EUR/USD parity effect adjusted), while their total FX deposits (including gold, price adjusted) rose merely by USD233mn during the week of February 27 – March 6.

* During the week of 6–13 March, the CBT’s gross reserves declined by USD7.8bn to USD189.8bn, while net FX reserves fell by USD9.8bn to USD68.9bn. Net reserves excluding swaps dropped more sharply, sliding by USD10.7bn to USD54.2bn. Meanwhile, based on the latest available CBT analytical balance sheet dated 18 March, our calculations suggest that from the beginning to the middle of last week, gross reserves recorded an additional decline of around USD3bn, while net FX reserves fell by approximately USD5.5bn.