Rally of Turkish Lira Continues

Rally of Turkish Lira Continues While negative interest rates continue in London, the rally of Turkish Lira continues. While weekly rates in the offshore market were close to zero, negative levels continued in overnight rates. Below the level of 7.35 was seen in the USD / TL exchange rate. The rally continued on the trading day, when trading volumes were weak in Turkish Lira. USD / TL rate decreased to 7.30 levels. Thus, the dollar / TL exchange rate was in the 200-day moving average. After last week's interest rate hike decision from Central Bank of the Republic of Turkey (CBRT) tensions in foreign exchange rates continues. The USD / TL declined from around 7.70 to 7.55 last week and completed the week at 7.5529. TL, which has appreciated against the dollar for the last six days, has been performing its best since May. Turkey has increased the 2-year Treasury bond interest rate 12 basis points to 14.9 percent. The yield of 10-year dollar bonds fell 13 basis points to 5.46 percent. The 5-year loan default swap (CDS) premium is 310 basis points.   Overnight Rates are at a Negative Level Overnight swap rate in the London offshore market was traded negatively at 3 percent. Speaking to Bloomberg, traders stated that volatile and negative offshore rates could prevent foreigners from taking more positions in Turkish Lira assets. The restriction of domestic banks' swap transactions with foreigners due to swap restrictions imposed by the BRSA, occasionally causes sharp confusion in the offshore market interest rates. Weekly interest rates in the offshore markets also reached levels close to zero.