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As the negative effects of the Corona virus epidemic continue on the economy, the depreciation of TL is increasing.
The dollar / TL, which started the day at 7.02 levels, continued to rise throughout the day. Thus, the record level of 7.24 seen in 2018 was slightly closer. On January 1, 2020, the dollar / TL rate was at the level of 5.95.
BLOOMBERG: 500 MILLION DOLLARS SOLD
On the other hand, to curb depreciation in TL, it was claimed that state banks are selling dollars today.
According to the Bloomberg report, state banks tried to stop the rise in exchange rates by selling around $ 500 million.
“EXIT CAN CONTINUE”
Murat Akyol of Famous Securities DAHA Financial Advisory Research, “The fact that the 7.00 level has been significantly exceeded in dollars / TL significantly deteriorates the short-term technical outlook. From this point of view, it can be said that the upside risks in the exchange rate are still valid ”.
Akyol also said: “The fact that the Central Bank reserve figures (CBRT) continue to be discussed, as well as the lack of real interest support from TL, shows that the range of action in favor of TL is limited, especially during periods of risk appetite. “
“HIGH CDS AND LOW INTEREST CREATE SENSITIVITY”
Economist Enver Erkan of Tera Investment noted that rising demand for dollars in world markets during the coronavirus pandemic and liquidity constraint as a result caused pressure from many developing countries against the dollar.
“TL is also affected by the demand for dense dollars as losers in this process,” said Erkan. “The fact that there are commodity prices and other dynamics in the business causes changes in the reaction range of countries in developing”.
Noting that TL’s unique sensitivity elements are seen as high CDS (credit default risk) and low interest rates, Erkan said: “It is expensive to take positions against TL in offshore markets, but the foreign swap market is On the other hand, the speculative positioning of the foreigner against TL continues. After the inflation data for April, the movement of the exchange rate settled above level 7, which was exceeded on May 1. “
EYES ON THE FED
Erkan listed the factors that would be critical in terms of exchange rates as follows:
The positive results of the exchange negotiations with the big central banks, especially the Fed-CBRT, establish a dollar-TL exchange agreement, which is also going backwards. The transition to normalization in the post-virus period exists worldwide, but it takes time for economies to return to normal and capital movements to normalize. It is useful to follow developments related to currency exchange agreements to meet the short-term need for liquidity in foreign currency.
CENTER PASS
The Central Bank (CBRT) raised the transaction limits of the TL exchange market against foreign currency and effective markets from 30% to 40% of the transaction limits.
The bankers who reported to Reuters said this change made by the CBRT came after foreign swap limits and BRSA’s lending rate adjustments.
The decision may allow the CBRT to increase its reserves through swap (foreign currency swap-TL).
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