WHILE EURO MADE INVESTORS HAPPY, DEPOSIT RATES DISSAPOINTED THEM

Based on September 2013 results of “Real Rate of Return of Financial Instruments” conducted by Turkish Statistical Institute (TUIK), while Euro made the investors gain a lot, deposit rates disappointed them. The experts worry about how much longer deposit rates continue to make the investors lose.

According to the assessment, Euro offered the highest real return with the rates of 2.22% when it was reduced by Producer Price Index (PPI), and 2.33% when it was reduced by Consumer Price Index (CPI). When reduced by PPI, investment tool dollar offered 1.94%, gold bar offered 1.29%, and BIST 100 Index offered 0.78% real return. On the other hand, deposit rates offered a 0.47% loss to its investor. When reduced by CPI, dollar offered 2.05%, gold bar offered 1.40%, and BIST 100 Index offered 0.89% real return, while deposit rates offered a 0.36% loss to its investor.

Halit Soydan, Lecturer at IUE Department of Economics, and Former Managing Director of Yapı Kredi and Garanti Banks, who evaluated the TUIK results, stated that savings came first in every economy, and that bank deposits making the investors lose purchasing power was not something particular to the month of September, and that the same issue was experienced frequently in the previous months as well. Halit Soydan indicated that investment tools changed places and foreign currency and gold offered real return to its investors. Halit Soydan stated the following:

“This process is not particular to this month. We experienced the same thing in the previous months also. Investment tools changed places but negative real return upset the investors from time to time. I am an old schooler. I say savings come first. How much longer can an individual savings account holder put up with the fact that his/her bank deposits lose its purchasing power!  In corporate property, foreign investor handles the issue in details anyway.”

Attention to the current deficit issue!

Lecturer Halit Soydan stated that in order to interpret the real returns based on “retail price index” and “producer price index” efficiently, one should thoroughly examine the table published by the World Bank as of 2012 which sheds light on the questions “What is the status worldwide, what is the ratio of savings of other countries to their national incomes?”. Soydan, who assessed Turkey’s position among other countries, said “When we look at the table published by World Bank as of 2012, we can see that Turkey surpassed China, and Singapore. We fell behind the half of Germany’s propensity to save. This very issue signals us that our national economy should dwell upon this subject. Foreign exchange gap, in other words current deficit issue, comes out as a natural outcome. And its effect stands before us as negative pulses of possibility of shrinking global financial markets.”