PASHA BANK ENG 20

The continuity of production, export and employment was backed up by the Economic Stability Shield package announced in March. 17.00 % CBRT policy interest rose to 17% with the increases made at the end of the year. CBRT increased the policy rate by 475 bps to 15% at the November meeting and by 200 bps to 17% at the December meeting and announced that for simplifying the monetary policy, all of the funding will be realized through the primary policy tool, i.e. one week repo interest rate. The financial markets reacted positively to the statements supporting the price stability following the reshuffle in the economy administration in November, alongside the normalization steps taken by BRSA and the CBRT reverting to tight and simple monetary policy by hiking the policy rate. The TL assets gained value while Turkey’s risk premium regressed to a large extent. The New Economy Program (NEP) released in September, covers the medium term targets for years 2021- 2023 and emphasizes inflation as the primary challenge. The main objectives of the program are; to establish balance permanently in current accounts, to implement policies making the country economy more resistant to internal and external shocks and creating a new financial architecture based on financial stability and security. Also, in order to realize sustainable growth, a new development plan will be carried out which observes the macroeconomic balances and is supported by strategic reforms. According to the market surveys, in 2021 the Turkish economy is anticipated to grow within a range of 4.0-4.5% and the inflation rate to be between 10.00-11.00%. When taken into consideration the worldwide increase in the number of coronavirus cases and the ever increasing restricting measures in the European countries which form an important export market for Turkey, it is anticipated that the pressure over external balance will endure. Nevertheless, with positive developments related to vaccine studies, it is anticipated that these pressures will ease as of 2021. Annual Report 2020 PASHA Bank General Information 21