USD/TRY, which rose for the eighth successive day, exceeded 15.65 for the first time after the FX-protected TRY deposit account was announced on December 20, 2021. USD/TRY exceeded 15.65 while EUR/TRY tested above 16.35 yesterday. Then, foreign exchange (FX) rates slightly dropped towards the evening. USD/TRY is traded at 15.77 and EUR/TRY is at 16.55 this morning.
Analysts point out that risks towards FX policy in which the public sector determines the direction have increased especially for the medium-term, according to Reuters. TRY devaluated by 5% against the USD in recent days when concerns over interest rate hike-driven recession and sales pressure have increased in the global markets.
In the meantime, Turkey’s CDS (credit default swap), which shows the cost of the protection of Turkey’s 5-year maturity debt against bankruptcy, has exceeded 700 points and reached its highest level since 2008, according to the data from Refinitiv. CDS broke another record at 718 points yesterday. CDS, which is considered an indicator of the risk of Turkey’s assets, raised the Treasury’s borrowing cost in USD. Bankers said costs have approached double-digit figures.
Turkey’s benchmark stock index went down 1.18% to close at 2,390.79 points yesterday. After starting the day at 2,419.93, the BIST 100 index lost 28.44 points from last week’s close of 2,419.23 points. Ending the day with a market value of around TRY 2tr, the index had a daily trading volume of TRY 34.3bn.
The Treasury and Finance Minister Nureddin Nebati convened with representatives from the housing and cleaning sectors. The parties held a comprehensive meeting about the steps to support people during the fight against inflation. The Treasury and Finance Minister said they are examining the market prices including the latest support package for the housing sector and are uninterruptedly continuing audits for many sectors.
Turkey would not greenlight NATO membership for countries that impose sanctions on it, according to President Recep Tayyip Erdogan. “We would not say yes to those who impose sanctions on Turkey joining NATO,” Erdogan told a joint news conference with his Algerian counterpart Abdelmadjid Tebboune in the capital Ankara. A NATO member for 70 years, Turkey, like all its fellow members, must approve of any new countries joining the alliance. Erdogan also criticized Finland and Sweden as lacking a clear stance against terrorist groups.
House sales surged by 38.8% to 133,058 units in April, compared to the same month last year, according to the Turkish Statistical Institute (TurkStat).
Producer Price Index of Agricultural Products (Agriculture-PPI) jumped 118.53% in April year-over-year, according to TurkStat. Agriculture-PPI climbed by 17.76% on a monthly basis.
The Parliament will discuss the legislative proposal on the amendment of the Decree-Law No. 655 on the Organization and Duties of the Ministry of Transport, Maritime and Communications, the Banking Law and the amendment of some laws.
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Our Eco Analysis columnist Alaattin Aktas analyzes the recent FX rate hike.