Volatility of the USD/TL Exchange Rate Hit a 3-Month High

Volatility of the USD/TL exchange rate hit a 3-month high. USD/TL volatility has reached its highest level since June.

While the USD/TL exchange rate rose by nearly 3 percent last week after the interest rate cut by the Central Bank of the Republic of Turkey, it broke the record by exceeding the level of 8.89 in the global markets. With the developments of the last week, the volatility indicators continue to rise. The USD/TL 1-month implied volatility indicator rose close to 50 basis points, reaching the highest level since June. The volatility indicator fell to the lowest level of the epidemic period in July. After starting September below 8.30, the USD/TL exchange rate rose by more than 7 percent and rose above the 8.88 level. The US dollar rate, which increased by more than 20 cents after the Central Bank of the Republic of Turkey’s (CBRT) rate cut decision last week, is trading around 8.86 on Monday, September 27. Turkey's credit default risk premium increased by more than 20 basis points to 422 basis points, while the 10-year bond yield rose more than 100 basis points to 18.57 percent, peaking since June.