Concerning dollar-TL parity exceeding 2.98 yesterday, President Recep Tayyip Erdoğan's senior economic adviser Cemil Ertem said these levels in the exchange rate show the strength of the Turkish lira given the global context, adding that the important thing is Turkish exporters can foresee how these fluctuations will affect them. Speaking to Turkish broadcaster NTV, Ertem also said Turkey will enter a more stable phase both in a global and domestic scale in the near term.
Speaking at a meeting of the Association of Economy Journalists, Bülent Gedikli, chief adviser to Erdoğan, said: "We cannot progress with hot money and a stock market perspective. This is why we say interest rates must decrease. Interest rate cuts do not lead to fluctuation in cash flow, but in exchange rates, which is for the good of stability. It would not be right for exchange rates to decline dramatically because of export strategies." The two advisers both said that the current dynamics will finally evolve into bringing exchange rate stability.
Meanwhile, the year-end expectation for the Turkish lira / US dollar parity increased in May from 3.0790 to 3.1087 in the market expectation survey conducted by the Central Bank of the Republic of Turkey (CBRT) released on Wednesday.
The parity rate is expected to drop to 2.9731 at the end of May, and will increase to 3.2176 at the end of the next 12 months.
Although the dollar-TL exchange rate started the day at 2.973 with a slight rise, the exchange rate increased to 2.985 yesterday due to the impact of the rising possibility that the U.S. Federal Reserve (Fed) might launch an interest rate hike in June, along with political developments, particularly the upcoming Justice and Development Party (AK Party) emergency convention this upcoming weekend. Because of this, the exchange rate, which started the week above 2.98 for the first time since Feb. 29, traded around 2.967 last evening.
U.S. inflation data, which came in above expectations, and Fed authorities' remarks that strengthen the possibility of an interest rate hike in June, have caused the dollar to gain value against developing country currencies on a global scale. Parallel to this, the dollar-TL exchange rate started the day in an upward trend.
Robert Steven Kaplan, the president of the Federal Reserve Bank of Dallas, said he would support a possible interest rate increase in June or July. Two Fed authorities also suggested they consider a 2 percent or 3 percent rise in interest rates to still be possible this year – giving the green light to an interest rate hike soon.
Political uncertainty has also risen since Prime Minister and Justice and Development Party (AK Party) Chairman Ahmet Davutoğlu tendered his resignation, pushing the Turkish lira down against the dollar. Davutoğlu leaving office has already put downward pressure on the prices of the assets denominated in TL since Davutoğlu's decision triggered political risks and raised questions about which path the economic administration will follow.
Please click to read our informative text prepared pursuant to the Law on the Protection of Personal Data No. 6698 and to get information about the cookies used on our website in accordance with the relevant legislation.
6698 sayılı Kişisel Verilerin Korunması Kanunu uyarınca hazırlanmış aydınlatma metnimizi okumak ve sitemizde ilgili mevzuata uygun olarak kullanılan çerezlerle ilgili bilgi almak için lütfen tıklayınız.