Foreign Currency and Gold are Declining Rapidly

Foreign currency and gold are declining rapidly. After the speech of CBRT President Ağbal, TL assets increased the acceleration of appreciation.

Having the best performance among the currencies of developing countries this week, Turkish Lira maintains its strong stance against foreign exchange. Statements made by CBRT President Naci Ağbal in his interview with Reuters News Agency increased the value of TL even more. CBRT Chairman Ağbal stated that there will be no interest rate hike for a long time and said, “We will move our pricing behaviors to the point we want in line with the aim of price stability by managing expectations by going ahead of the market with the decisions we will make and strong communication.” Thus, Ağbal signaled that market-friendly steps will continue. The rise of tight monetary policy expectations in the markets together with the statements made by Naci Ağbal creates the expectation that the same path will be followed in the fight against inflation. On the other hand, the increased risk appetite in global markets supports the decline in foreign exchange. The USD/TL exchange rate fell to 7.0825 today, the lowest level since August 6, while the Euro/TL decresed to 8.4760, the lowest level since August 21. The CDS 5-Year USD also dropped below 300 bps, the lowest level after March. Gram gold declined to 409 TL and recorded the lowest level since July 22, with the sharp declines on the ounce along with the foreign currency. On the last trading day of the week, the Turkish Lira diverged positively, while the dollar rate lost close to 3 percent weekly and the Euro rate lost nearly 4 percent weekly.       This article has contributions of Investing.com.