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The Governor of the Central Bank, Naci Ağbal, was dismissed and Prof. Dr. Following the appointment of Şahap Kavcıoğlu, there is great dynamism in the markets. Last night, the dollar / TL rose to 8.47 and the euro / TL rose to 10.05 in the low volume market.
The Dollar / TL first saw gold below 7.70 this morning and then rose above 7.95 again. In the afternoon, it first fell to 7.85 and then rose again to 7.95. Similarly, Euro / TL, which saw below 9.20, first rose above 9.50. Then it dropped to 9.39. It exceeded 9.52 towards the close of the market.
The dollar closed last week at 7.2185 and the euro at 8.5949 liras.
RAISING LOW
This rise in the exchange rate was also reflected in gold prices. Gold gram, which closed last week from 404 lire, rose to 442 lire this morning. The price of an ounce of gold fell 0.8 percent to $ 1,733. In other words, the increase in gold in the domestic market is entirely due to the exchange rate.
EXCHANGE FELL VERY DIFFICULT
At Borsa Istanbul, the BIST 100 index fell 6.65 percent at the open to 1,427 points. Then the transactions stopped 2 times. BIST closed the 100th day at 1,379 points down 9.79 percent. The decline in the BIST Bank index reached 9.89 percent.
Meanwhile, Borsa İstanbul announced that the transactions were instantly scrutinized and an investigation for inappropriate transactions would be launched. In the statement made to the KAP, the following statements were made:
INSTANTLY MONITORED
“As Borsa İstanbul A.Ş., to ensure the operation of our markets in an effective, reliable and transparent environment, the transactions carried out in the markets of our Exchange are monitored instantly and continuously within the scope of surveillance activity, y Our investment institutions and investors are strongly requested to demonstrate the necessary sensitivity in complying with the legislation. The public is respectfully announced that all necessary measures will be taken against transactions that do not comply with the regulations of the Market Board of Capital and our Stock Exchange. Exchange, especially short sale transactions, and that inspection and audit activities will be carried out with care.
Meanwhile, the Borsa İstanbul website could not be accessed temporarily. The message “we will be back soon” appeared on the site:
QUICK RISK IN RISK BONUS
Meanwhile, Turkey’s 5-year risk premium (CDS) based on Friday’s close 466 to 158 basis points increases in production. The interest rate on 10-year treasury bonds rose more than 18 percent with an increase of 401 basis points.
WEEKLY EXCHANGE INTERESTS OF TL ABROAD EXCEED 100 PERCENT
Weekly foreign TL swap rates exceeded 100 percent. Interest rates were at 14.20 percent on Friday.
A REVIEW OF MOODY’S
Credit rating agency Moody’s announced that with the removal of the CBRT director, capital inflows into the country would likely reverse and put pressure on the exchange rate again, leading to higher inflation. Moody’s also stated that the CBRT can lower the policy rate back below the inflation level to ensure growth during the term of the new president Şahap Kavcıoğlu.
KAVCIOĞLU AND ELVAN’S EXPLANATIONS
These movements in the markets have raised concerns that the tight monetary policy implemented under the fired central bank governor, Naci Ağbal, has been shelved. In his first statement, the new president Şahap Kavcıoğlu affirmed that the fight against inflation will continue with determination.
“THE APPLICATION OF THE LIBERAL EXCHANGE REGIME WILL CONTINUE WITH THE DETERMINATION”
Treasury and Finance Minister Lütfi Elvan said: “We attach great importance to the efficient and healthy functioning of the markets. In this context, there will be no concessions from the free market mechanism and the implementation of the liberal exchange rate regime will continue resolutely.” “.
INTEREST INCREASE OF 875 BASE POINTS IN 133 DAYS
Naci Ağbal was appointed to replace Murat Uysal on November 8, 2020. Ağbal raised interest rates by 675 basis points in November and December last year after taking office.
The Central Bank under Ağbal’s administration, which did not raise interest rates in January and February in the new year, decided to increase the interest rate by 200 basis points last Thursday. Ağbal’s tenure lasted 133 days. The total increase in the interest rate amounted to 875 basis points in 133 days.
