While interest rate cuts by major central banks were followed in the third quarter, covering July, August and September, the Fed made its first interest rate cut of the year in September, before the US elections. The bank reduced the policy rate for the first time since March 2020, reducing the policy rate by 50 basis points and bringing it to the range of 4.75-5.00 percent.
In September, the European Central Bank (ECB) made its second interest rate cut of the year in line with market expectations, reducing the deposit interest rate by 25 basis points and the main refinancing rate and marginal borrowing rate by 60 basis points each. Together with the ECB, the Bank of England (BoE) reduced the policy rate by 25 basis points to 5 percent, within expectations, making it the first rate cut since March 2020.
Trump tariffs came to the fore
While recession concerns around the world continued, albeit limited, in the fourth quarter of the year, expectations regarding the economic policies to be implemented by the candidate who would win the US presidential elections had an impact on the direction of the markets.
Republican candidate Donald Trump’s statements that he will implement a more protectionist economic policy in the USA feeds concerns that inflationary pressures in the country may increase in the future, while policy disagreements may arise between the US Federal Reserve (Fed), which reduced interest rates by a total of 50 basis points in the quarter in question. Uncertainty was among the prominent factors in pricing.
With Trump’s victory in the elections against his rival Kamala Harris at the beginning of November, the possible effects of Trump’s policies such as tariffs, immigration restrictions and tax reductions on the economy in the new period were carefully monitored, while developments regarding whether the USA would have problems with its important trade partners became the focus of investors.
The slowing economic activity in Europe during this period
While the interest rate cuts of the European Central Bank (ECB) were followed in order to stimulate interest rates, the increase in tension between Russia and Ukraine and the political crises that emerged in France and Germany caused a decrease in risk appetite in the equity markets. On the Asian side, the political crisis in South Korea, the signals received from macroeconomic data in Japan and China, and Trump’s attitude especially towards China had an impact on the stock markets in the region.
Disinflation process continued in the country
While the steps taken under the leadership of the new economic management continue to stand out in the country, the tight stance in monetary policy and the additional decisions taken left their mark on the third quarter of the year. The current account showed a surplus after 8 months. While Turkey’s current account account had a surplus of 407 million dollars in June and a surplus of 4 billion 549 million dollars in its current account account excluding gold and energy, Turkey had a current account surplus 8 months later.
While the simplification process of the Central Bank of the Republic of Turkey (CBRT) and the gradual steps taken to encourage investors to switch from exchange rate protected deposits (KKM) to Turkish lira deposits are being followed, the total KKM balance, which was 68.1 billion dollars at the beginning of the quarter, reached approximately 51.1 billion dollars. declined.
The continued real appreciation of the Turkish lira and the steps taken in the economy were effective in the decline of KKM. However, the disinflation process continued domestically. The increase in the Consumer Price Index (CPI) decreased on an annual basis in July, August and September. While CBRT reserves broke consecutive records in the last quarter of the year, Turkey’s 5-year credit risk premium (CDS) fell below 250 basis points for the first time since February 2020.
Minister of Treasury and Finance Mehmet Şimşek commented on Turkey’s CDS falling below 250 basis points: “Thanks to our improved risk premium, access to external financing becomes easier and the cost of external financing decreases.” CBRT’s total reserves reached an all-time high in the week of December 13, increasing by 4 billion 92 million dollars compared to the previous week, reaching 163 billion 482 million dollars. The disinflation process continued in the last quarter of the year, and the decline in the Exchange Rate Protected Deposit (KKM) balance continued.
“Turkish industrialists’ investment appetite will not decrease”
M. Rıfat Hisarcıklıoğlu, President of the Union of Chambers and Commodity Exchanges of Türkiye (TOBB), published a new year message. Wishing 2025 to be a healthy and good year for everyone in his message, Hisarcıklıoğlu included the following statements: “I believe that the investment appetite and employment desire of Turkish industrialists and traders will never decrease in the light of our country’s macroeconomic balances.
We promise to work with all our strength to bring our economy to better points together. From time to time, difficult and troublesome processes can be experienced all over the world. To the future of our country; Our dreams and hopes for the good, the true, the beautiful are big and strong enough to destroy all kinds of negativity.”
Source: www.dunya.com
