Lira rises against pound, loses against dollar


Following Britain's decision to withdraw from the European Union, the value of the Turkish lira has risen and enabled local investors to derive profits from sales, and has pushed the dollar to TL 2.9085. With the announcement of the Brexit referendum results, the value of the dollar has rose above 3.00 and reached a balance at 2.93 on Friday afternoon. Also, the value of the British pound in relation to the lira has dropped to its lowest level since April last year. Britain's historic vote on secession from the EU has both dragged the country's future into uncertainty and dealt a heavy blow to the integrative efforts of the EU, which has aimed to form a more unified Europe since World War II.Global financial markets have plunged as referendum results showed 51.8 percent of the British people voted to exit the union, while the remaining 48.2 percent voted to remain in it.After the dollar-lira parity surged to 3.0015 from 2.8731/2.8754 on Thursday evening, it finally dropped below 2.92. The parity last experienced the same high level on May 24. Currently, as of press time, it is hovering above 2.92.The pound-lira parity, which reached 4.2419 at the end of Thursday, has dropped down to its lowest level, 3.9205, since April 14, 2015.Speaking to NTV, HSBC Portfolio Strategist İbrahim Aksoy said global central banks might display a coordinated action in the upcoming period in the wake of the referendum, adding that for a while, markets will not ask when the U.S. Federal Reserve (Fed) will hike interest rates. Aksoy also noted expectations that the post-Brexit period will experience abundance in global liquidity, which might create a positive atmosphere in the markets after a while, continuing, "This is not yet the case, but it will happen after sales continue for a bit more." Referring to the fact that the lira has lost 2.2 percent of its value against the currency basket and the five-year Credit Default Swap (CDS) has increased, Aksoy said, "Interest rate cuts launched over the past four months and the residents' decline of foreign exchange deposits by $8 billion, which has left no supportive space for the lira, indicates that the dollar might exceed the 3.014 level that it experienced on May 24." According to Aksoy, the decline in the U.S.'s bond yields might restrict the upward impact on lira-denominated bond yields to a certain extent. With the decrease in global risk appetite, the 10-year bond yields, which stood at 9.45 percent at the end of Thursday, might approach 10 percent today.