USD/TL Rate Started the Critical Day Horizontally

The USD/TL exchange rate started the day, when the CBRT's interest rate decision was announced, with a horizontal course.

USD/TL rate started the critical day horizontally. In the global markets, most of the developing countries' currencies followed a horizontal course in the first transactions against the dollar. In domestic markets, all attention has been turned to the policy rate to be announced by the Central Bank of the Republic of Turkey. However, the Turkish Lira started with a horizontal course on Thursday along with the exchange rates of many developing countries. First transactions in dollar/TL, which saw above 7.05 level on Wednesday, passed 6.97. The Bloomberg Dollar Index continued to follow a horizontal trend. While Turkish assets have increased since the previous CBRT meeting, the latest inflation data was again above expectations. The general expectation of economists who evaluated this situation was that the CBRT would not change the interest rate at this meeting. However, there are also economists who expect an interest rate increase, albeit limited. Turkey's risk premium is 293 basis points, while benchmark bond interest is traded at 15 percent.   Gradual Normalization Since March Turkey will implement the withdrawal of restrictions applied within the scope of combating the coronavirus epidemic as of the beginning of March. President Erdoğan, who made a statement yesterday, stated that the provinces in Turkey will be divided into four groups according to the criteria set by the Ministry of Health, and the normalization steps for epidemic measures will be whitdrawn gradually from the first days of March. Saying, "We will classify our provinces as low, medium, high and very high risk," Erdogan announced that the roadmap for cafes, restaurants and cafes that had to take a break due to epidemic measures, will be announced in the next few days. Erdoğan also said, “The situation of the students will also be evaluated according to the number of cases in the provinces. We are removing the curfews gradually, depending on the situation in our provinces." Erdogan also shared with the public that the short work allowance, which was extended until the end of March, was extended for the "last time".