US dollar Is At Its Highest Since February 4th

The US dollar is at its highest level since February 4th. The USD/TL rate has risen over 2 percent since the beginning of the week.

While the USD/TL exchange rate has increased by more than 2 percent since the beginning of the week, it reached the level of 7.1479 today. The Central Bank of the Republic of Turkey (CBRT) also made moves to tighten liquidity further. Although the USD/TL exchange rate moved upwards compared to the beginning of the week, it displayed a horizontal movement with the level of 7.1217 at 11:28 am. In its decision published in the Official Gazette, CBRT announced that TL required reserve ratios were increased by 200 basis points for each term. Economists think that the CBRT, which gave 600 billion TL to the markets, may have wanted to withdraw some more TL from the market in order to increase the dose of tightness in monetary policy. According to the statement made by the CBRT on the said amendment, if the reserve option utilization ratios remain the same for the remaining tranches with the changes, the required reserve facilities in Turkish lira will increase by approximately 25 billion TL, on the other hand, total reserve deposits in foreign currency and gold are projected to decrease by USD 0.5 billion. In addition, it was noted that the interest rate to be applied to required reserves in Turkish lira was increased by 150 basis points to 13.5 percent. These changes will take effect from the February 19, 2021 liability period, the facility of which will begin on March 5, 2021.