The dollar's decline was not permanent! Latest situation in dollar and euro The dollar started the new day from 7.90, and the euro from 9.37 lira. The dollar / TL, which exceeded 8.50 3 weeks ago, declined to 7.52 after the Central Bank's interest rate hike last week. However, this decline was not permanent.
The dollar / TL, which started the day from 7.66 lira yesterday, rose to 7.95. It closed the day with 7.88 liras. The increase in domestic foreign exchange demand was effective in this steep rise.
The dollar started the new day from 7.90 liras below the critical level of 7.90 liras, and the euro from 9.37 liras.
Last week, after the Central Bank's interest rate hike by 475 basis points, the dollar / TL fell from 7.70 to 7.52. However, the decline in exchange rate was not permanent.
Kurda has been experiencing great volatility for the last 5 weeks. At the Central Bank Monetary Policy Committee (MPC) meeting in October, the market was expecting a significant increase in policy rate. However, in the last meeting chaired by Murat Uysal, the PPK decided to keep the interest rate constant and the exchange rate started to move upwards.
BROKED THE RECORD 3 WEEKS AGO
3 weeks ago, dollar / TL broke a record by exceeding 8.50. Later, changes in the economy management and market-friendly messages caused a sharp fall in the currency. The messages given by Naci Ağbal, the new Central Bank President and the Minister of Treasury and Finance, Lütfi Elvan, that all the necessary tools will be used, resulted in the expectation of an interest increase again. This time, the PPK convened under the chairmanship of Naci Ağbal increased the interest rates by meeting the market expectations.
After that, TL became the most appreciated currency in the world against the dollar last week. On the contrary, yesterday, it was the currency that lost the most value against the dollar in the world. Daily increase in USD / TL exceeded 3 percent.
Analysts stated that the profit realization of international investors who took short positions in USD / TL prior to the Central Bank decision, combined with the fact that domestic residents saw the falling exchange rate buying opportunity, and this caused a depreciation in TL.
'WILL TAKE TIME'
Last week, evaluating developments in the credit rating agency Fitch, reconstituted the credibility of Turkey's monetary policy and announced that it will take time to rebuild foreign exchange reserves of the Central Bank. Evaluating positively that the policy rate was reduced from 10.25 percent to 15 percent to the level of funding cost and that all funding was made through this channel, the organization interpreted these steps as "a step towards improving the reliability of monetary policy".
No data will be released today that will affect the markets. increasing cases of coronavirus in Turkey is being followed with concern by the market may bring new measures.