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    Thoughts foreign exchange credit gives rise to
    Fatih Özatay, PhD 18 June 2009
    Over the period from the beginning of June important economic decisions have been announced. I believe that the mentioned decisions are favourable in general. However, this judgement does not mean the decisions pose no risks nor have no deficiencies. In this context, I would like to address the decisions concerning foreign exchange credit. [More]
    Is it necessary to sign an agreement with the IMF?
    Fatih Özatay, PhD 14 June 2009
    Current state of affairs in Latvia proposes solid grounds for those who consider not signing an agreement with the IMF and who recommend us not to sign an agreement with the IMF. Foreign currency denominated debts of banking, corporate and household sectors have reached unprecedented levels. Public budget performs badly. Latvian Treasury tried to sell t-bills to finance budget deficit last week; but failed. The auction did not receive sufficient demand. The country implements fixed exchange rate regime; Latvian currency unit lat is pegged to euro and is allowed to float within a very narrow interval (minus-plus 1 percent). These circumstances put lat under the pressure of a significant devaluation. The interesting thing is; Latvia has a stand-by agreement with the IMF. That is, all of thes [More]
    High interest rate policy of the USA
    Fatih Özatay, PhD 11 June 2009
    Some developments about the Treasury bill market of the USA and the news about the said market has become quite interesting lately. Interest rate of long term USA bills has risen significantly in the week before. This rise was also addressed by FED President Bernanke who pointed out the relationship between the rise and the unsustainability of the current fiscal policy and made a speech on the importance of fiscal discipline. Yesterday, prominent economics news channels announced this: T-bill tender hold by the US Treasury received a considerable demand. This way, US Treasury easily made borrowing. [More]
    While everyone is moving in the right direction…
    Fatih Özatay, PhD 08 June 2009
    FED President Bernanke's speech delivered in the House of Representatives budget committee was quite interesting. His speech was addressed in Turkey under the framework of the answer for the question 'Did we hit the trough?' However, the speech involved findings beyond that. [More]
    Latest developments
    Fatih Özatay, PhD 07 June 2009
    Table 1: Automobile production and import levels (units)   [More]
    Short term –long term dilemma
    Fatih Özatay, PhD 01 June 2009
    Among the important economic factors that will put its mark on the medium term the first is that there is a high risk abundant global capital seen before the crisis period evaporates. For two reasons: First, the global economy was run over by a cylinder, it will need long time to recover. Second, from this point on, supervision and monitoring will be a carried out not only for certain part of the fiscal system but for the whole system and will be more detailed. [More]
    The tax issue
    Fatih Özatay, PhD 31 May 2009
    Let's say that you are aiming to boost domestic demand. What are the tools you have? Tax rate cuts, transfer of a portion of the budget to some sectors (increasing transfer payments) and raising public expenditures. It is obvious that tax cut increases domestic demand. Therefore, this is not subject to discussion. No one says you cannot increase spending via tax rate cuts. [More]
    A sensitive story
    Fatih Özatay, PhD 28 May 2009
    We were living in Erzincan province. I and my elder sister were going to elementary school.  After the school, my mother used to take us to day session of a movie from time to time. I remember watching Turkish films in general. And without a doubt, three of us used to cry during the movie. [More]
    Is recovery without credit possible?
    Fatih Özatay, PhD 25 May 2009
    Latest changes on the volume of loans extended by the banking sector were as follows: First, volume of total credits neither had a downward nor an upward trend over the last weeks. In other words, downward tendency observe since October came to an end. Second, volume of consumer loans was increasing since March 20. Third, this phenomenon observed both in total credits and consumer loans did not apply for all bank groups. While the volume of credits extended by private banks fell down, that extended by public banks went up. [More]
    Instead of getting angry at banks…
    Fatih Özatay, PhD 24 May 2009
    No matter what type of accusations the officials bring against banks, I believe the essence of the issue is obvious for us: Loan market is different; it does not function like the pottery market. Person demanding a loan gets it today and in exchange promises to pay it back in a certain date in the future. What if the promise is not kept? Therefore banks, even under normal conditions, go over the application with a very fine comb before extending a loan. [More]