The week in brief
June PMI – both overall and the output subindex -- rose to over 50 in June. As we wrote last week for confidence indicators, we think this is primarily a temporary, post-lockdown rebound, and we should see a visible slowdown in economic activity during the second half.
Trade data for May and June showed exports are doing well, but interestingly, imports are still growing sequentially as well, or so we reckon.
The CBRT has changed the reserve requirement policy, as signaled earlier. Our broad reading of the fairly convoluted scheme is that it is a way of telling the banks “let us give you a few billion liras, and in return, you try to convince your clients to switch to TL”. It will not work or make a material difference, in our view, because macro, politics and institutions are all in very poor state.
We joined the CBRT’s Investor Meeting on Friday, but we learnt nothing new, nor did we expect to, to be honest.
Meanwhile, important personnel changes seem to be taking place at the CBRT, and to a lesser extent in Turkstat, which, along with a few other developments, we watch with premonition.
Now read on...
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