The Dollar/TL Exchange Rate Continues to Rise
The upward momentum of the Dollar/TL rate last week continues in the upward direction today. While the daily rise in the exchange rate recorded the level of 1 percent, the level of 16.25 was also tested.
The Turkish lira depreciated against the dollar before the Monetary Policy Committee meeting of the Central Bank of the Republic of Turkey took place. Having exceeded the 16 level on Tuesday, the Dollar/TRY rate continued to rise by 1 percent on the new trading day and tested over 16.30.
Among the reasons for the increase in the Dollar/TL rate, the expectation of a decrease in the Central Bank reserves is the first. While the benchmark bond rate is trading at 26.97 percent, Turkey's risk premium continues to be at its highest level since the 2008 financial crisis.
The Turkish lira is stated as the currency of the developing country that has lost the most value against the dollar since the beginning of this year. SEB EU Chief Emerging Markets Strategist Per Hammarlund underlined the increasing pressure on the TL, and drew attention to persistently rising inflation, signs of slowing growth in Turkey and its main trading partners, and a 'misguided' monetary policy.
Monex Europe Ltd. Simon Harvey, Director of FX, also emphasized that "deteriorating external financing position, rising inflation, further deterioration in inflation expectations, political separation with Western countries in NATO and the Central Bank's inability to change its policy in a way that will affect macro developments."