President Erdoğan's adviser says dollar-TL to be between 2.80 and 2.88

In response to the rising trend in the dollar and global markets being influenced by remarks from the United States Federal Reserve (Fed) signaling an interest rate hike in the near-term, President Recep Tayyip Erdoğan's senior economic adviser, Yiğit Bulut, said markets might not be acting rationally and that he believes the dollar-Turkish lira exchange rate should be fluctuating between 2.80 and 2.88. He added that the exchange rate, which started yesterday at around 2.96, should also return to these levels.

The dollar index rose to a two-month peak against the basket of major currencies, including the Turkish lira, which ended the Friday session at 2.9490 and started the week at 2.9640, weakening against the dollar, after Fed Board Chair Janet Yellen suggested that an interest rate hike in the U.S. may occur at one of the Fed's meetings this summer. However, the Turkish lira started regaining power against the dollar, fluctuating around 2.9560 at around 3:10 p.m. (GMT+3) yesterday.

The Fed should raise rates "in the coming months" if growth picks up and the labor market continues to improve, Yellen said on Friday. St. Louis Fed President James Bullard chimed in, saying on Monday, global markets appear to be "well-prepared" for a summer rate hike, although he did not specify a date for the policy move. The probability of a rate increase at the Federal Open Market Committee's June 14-15 meeting rose to around 34 percent from 26 percent on Thursday, according to CME's Fedwatch program. Bets on an increase at the July 26-27 policy meeting edged up to 60 percent, more than double the level of a month ago. Yesterday, following Yellen's remarks, against a basket of currencies, the dollar was up 0.4 percent at 95.879, while the euro struggled near two-and-a-half-month lows of $1.1097 hit in the Asian session.