The Turkish central bank invites foreigners to invest in lira-denominated government bonds

Turk Press – Al Jazeera

The Turkish central bank has invited foreigners to invest in lira-denominated government bonds amid growing investor interest in Turkish assets.

Official data reported in the Daily Sabah newspaper showed that foreign investors are increasingly interested in Turkish properties, with foreign investors making acquisitions worth 42.13 billion liras ($1.45 billion) in the week ended Dec. 8. /July 2017.

This recovery in investment follows large interest rate hikes in recent months that have restored traction on the market.

The central bank has raised interest rates by 3,150 basis points to 40% since June.

Foreign investors paid a net $891.4 million in Turkish local government bonds in the week ended Dec. 8, the highest weekly amount since August 2017, Turkish central bank data showed last Thursday, according to Daily Sabah.

Foreign investors’ inflows to the Turkish stock market hit $562.4 million, the biggest weekly amount since November 2020, the newspaper pointed out.

Meanwhile, Turkish Central Bank Governor Hafiza Kaya Argon said the monetary tightening cycle in Turkey is nearing its end, calling on foreign investors to invest in Turkish lira-denominated government bonds with favorable yields at present.

Tighter monetary policy has started to affect consumer prices, but single-digit inflation will not be reached before 2026, Arkan added in an interview with the local Hurriyet daily newspaper on Saturday.

Amid the improved data, data from Standard & Poor’s showed that the cost of insuring Turkey’s debt against default fell to a nearly 3-year low on Thursday.

Turkey’s new economic administration has returned to more traditional policymaking after President Recep Tayyip Erdogan won a new term in May, adopting strong domestic demand and strong monetary tightening to control inflation.

Annual consumer price inflation in Turkey rose to 61.98% last November, driven by rising food and transport prices, official data showed.

The government sought to rebuild foreign exchange reserves and increase investments and exports to improve the current account balance.

The Turkish central bank’s total reserves rose by $1.225 million to $141.3 billion in the week ended December 8.

According to Turkish Central Bank data released on Thursday, the bank’s total foreign exchange reserves increased by $1.276 billion to reach $94.5 billion in the aforementioned period, while total gold reserves decreased by $52 million to exceed $46.8 billion.