Economy in Turkey: 5-Year CDS of Turkey falls below 350 basis points

Turkey’s 5-year credit default swap (CDS) has fallen below 350 basis points for the first time in about 3 years, reaching 348.2 levels. Turkey’s risk premium had risen above 700 basis points in May, reaching the highest level since October 2022.

Turkey’s CDS, which was at 700 basis points in May, has dropped by approximately 350 basis points in the last six months, falling below the 350 basis point level.

Following the statements of CBRT Governor Hafize Gaye Erkan in the latest Inflation Report presentation, demonstrating determination in the fight against inflation, the decline in Turkey’s CDS accelerated again and reached around 365 basis points on November 3rd. The declining trend continues, with CDS standing at 348.2 basis points today.

Turkey’s risk premium rose above 700 basis points in May, reaching the highest level since October 2022

At the time of the second round of presidential elections (May 2023) in Turkey, the volatile movement in exchange rates and risk premiums had led to surpassing new thresholds. At the same time, the USD/TRY pair had surpassed the 20 level in the interbank market for the first time, and Turkey’s risk premium had also risen above another threshold.