Longest Rally Since May 2019 in TL

The longest rally has been taking place in TL since May 2019. The Turkish Lira has been maintaining its strong stance against the dollar for a week.

The longest rally has been recorded in TL since May 2019. After the inflation data for the month of January, which was announced above the expectations, the appreciation trend recorded in the Turkish Lira continues with the expectations that the CBRT will maintain its tight stance policy for a long time. While the Turkish lira has been gaining value against the US dollar for a week, it has been holding its longest rally since May 2019. The statements made by CBRT President Naci Ağbal regarding the tightening had an effect on the decline of the USD/TL exchange rate. Speaking to Reuters, Ağbal gave the message that the tightening policy will continue for a while and said, “It is unlikely that we will put interest rate cuts on the agenda for a long time.” Explaining that January inflation showed upside risks to expectations, Ağbal noted that there is no such thing as a swap agreement with foreign central banks. The benchmark, the bond rate traded at 14.77 percent, while Turkey's risk premium saw 294 basis points. Thus, the lowest level of 1 year was reached in the risk premium. Phoenix Kalen of Societe General stated that she expected the Turkish Lira rally to continue in 2021. The institution estimates that the USD/TL rate will decline to 6.5 in the 4th quarter. She said that she expected the CBRT's policy rate to be gradually reduced to 15 percent in the last quarter. Kalen predicted that the policy rate, which is currently 17 percent, will be kept constant until the 3rd quarter.