Turkish FX retail deposits
I am starting with where I left off at the last post, i.e. foreign currency deposits.
Foreign currency deposits have in the past often acted as a buffer against lira depreciation, with domestics selling FX when lira starts to lose value. So I have been wondering what happened in the latest b0ut of last lira tremors, between July 22-26.
The early reports I read, mainly from Turkey economists of foreign outfits, were saying there was at least no FX-buying by domestics during this most recent episode. But a market participant let me know that this wasn’t the case. Her bank was met with FX-buying from individuals and corporates alike as soon as AKP topbrass Bulent Gedikli’s crisis warning appeared on the paper. Even more interestingly, there were requests from large corporates on huge amounts of FX buying.
While the actual data will not be up until Thursday, I have verified these with my trader friends, and contrary to some are saying (I asked the same question to Turkish TV station NTV’s econ. stars Mahfi Egilmez & Servet Yildirim, and they too said they thought there wasn’t much FX-buying by domestics), it seems there was considerable FX-buying by domestics. If that’s the case, with the one-way trading, I would say the lira actually held up quite well:)…
Anyway, we’ll know the details on Thursday, and I will be sure to post soon after the Central Bank’s weekly press bulletin, where these data are reported, are released.
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