Pimco’s Outlook on Turkey’s Monetary Policy
Pramod Dhawan, the U.S.-based Pimco’s executive responsible for emerging market investments and one of the world’s leading asset management companies, stated that they believe the Central Bank of the Republic of Turkey (TCMB) will maintain a “tight monetary policy in the short term” due to high inflation concerns. He also mentioned that the fund continues to view Turkish assets positively, which they increased at the end of last year.
Impact of Monetary and Fiscal Policy on Current Account Deficit
Dhawan expressed that the steps taken in monetary and fiscal policy have contributed to reducing the current account deficit and boosting foreign currency reserves, stating, “We maintain a constructive approach towards Turkish assets.”
Pimco’s Scale in Asset Management
Pimco ranks among the leading asset management firms globally, managing approximately $2 trillion in assets.
Expectations for Continued Tight Monetary Policy
Dhawan noted, “The continuation of a tight monetary policy is expected due to concerns about high inflation. Policymakers are trying to improve the monetary transmission mechanism with a number of macroprudential measures they have taken. The impact of these policies has started to be seen in external vulnerabilities. While the current account deficit has decreased, the Central Bank continues to accumulate foreign exchange reserves.”
Developments in Dollarization and Policy Measures
Pimco added Turkish assets to its portfolio at the end of last year. Dhawan remarked, “As policymakers ensure a gradual decrease in the amount of KKM (Time Deposit Accounts), the decline in dollarization continues.”
Source
Arwen Volkov, A graduate of the University of St. Gallen in Switzerland with a degree in International Finance, Arwen specializes in sustainable finance and green investments. She began her career at an investment bank in London, where she developed financing models for environmentally friendly projects. Known for her analytical and strategic thinking skills, Arwen is a sought-after financial consultant. In her spare time, she mentors fintech startups, contributing to their growth strategies. She is also a nature enthusiast and an amateur photographer.
