Foreign exchange fluctuation is continuing in the Turkish market after the 31st March local election with the Lira weakening 2 percent of its value against the US Dollar. The USD/Lira performed 5.58-5.61 in the early morning on Tuesday.
US-based multinational Investment Bank Goldman Sachs extended The Central Bank of the Republic of Turkey’s (CBRT) interest rate cut expectation to the fourth quarter.
Goldman Sachs stated that the main drivers for the Turkish economy will be financial stability rather than inflation.
Uncertainty around the election results and a Moody’s report yesterday which shared the concern of CBRT’s interference on the swap market to prop up the Lira pushes the currency to 5.70 against the US Dollar. However, thanks to domestic assets sale, USD/Lira exchange rate reduced to the range of 5.58-5.61.
US government’s suspension of F-35 aircraft delivery negatively affected Lira and Dollar increased to 5.55 against Turkish currency on Monday evening. This morning the dollar is trading in the range of 5.58-5.61. The Lira stood in the range of 6,26-6,29 against the Euro and 7,27-7,30 against the pound sterling.
The Turkish lira collapsed to an all-time low against the dollar as Turkey resisted the release of US Pastor Andrew Brunson despite US President Donald Trump’s pressure.
US-Turkey relations strained again as the NATO opposed that Turkey cannot have both F-35 and Russian air and missile defense system S-400.
Besides the international crises, AKP applied to Supreme Election Board of Turkey to re-count votes in Istanbul as the opposition CHP’s candidate Ekrem Imamoglu saved around 29 000 more votes.
“The central bank (CBRT) had been intervening in the local foreign exchange market to prop up the lira ahead of municipal elections. Intervention to support the lira is contrary to the central bank’s longstanding policy to allow the exchange rate to float freely”, rating agency Moody’s warned saying that the CBRT’s intervention poses renewed questions about the transparency and independence of the central bank.