What matters on Tuesday, May 24

TRY kicked off the week with devaluation, which has continued for nearly the last two weeks. EUR/TRY exceeded 17.00 after EUR/USD parity rose by over 1.0% yesterday. Thus, EUR/TRY rose above 17.00 for the first time since December 20, 2021, when the foreign exchange (FX) rates sharply fluctuated, and the FX-protected TRY deposit accounts were announced. EUR/TRY is traded at 17.25 this morning. USD/TRY, which hit 15.99 last week, fell below 15.80 after hitting 15.97 yesterday. However, USD/TRY is traded at 16.08 this morning. On one hand, USD/TRY rose above 16.00 for the first time since December 20, 2021, on the other hand TRY depreciated by over 8% against USD since the beginning of May.

Concerns over tightening, inflation, and growth continue, according to analysts. They say the opinions about overpricing of current concerns led to the decline in the USD index. They also stated that 102.3 points will be the support level and 103.4 points will be the resistance level for the USD index, in technical terms.

The new inflation-indexed instrument was expected to be announced after the Cabinet meeting yesterday, as the government previously stated that preparations were completed for inflation-protected bonds. The fact that the new product may pave the way for the avoidance of TRY, FX, and, even the FX-protected TRY deposit accounts if it becomes attractive is creating concerns for the banking sector.

However, the new product hasn’t been announced yet. President Recep Tayyip Erdogan stated after the Cabinet meeting that they are aware of issues in the country, including the cost of living. “We are setting up and employing all possible mechanisms to protect low-income people. Our next goal will be steps to increase the welfare level of citizens,” President Erdogan noted. Erdogan also said he discussed Sweden’s bid to join NATO with NATO Secretary-General Jens Stoltenberg, Dutch Prime Minister (PM) Mark Rutte, and British PM Boris Johnson. He reiterated that the government will not accept any country that supports terrorism into NATO.

Moreover, President Erdogan announced a new cross-border operation. He said that the government is taking the final steps towards establishing safe zones across Turkey’s southern borders. “The operation will start when the Turkish Armed Forces, intelligence, and police forces complete their preparations,” he noted.

IYI Party leader Meral Aksener received U.S. Ambassador to Ankara, Jeffry Flake, who paid a courtesy visit. The parties discussed global developments and swapped notes about Turkish-American relations, according to a statement from the IYI Party. Flake also visited People’s Democratic Party (HDP) co-chairs Pervin Buldan and Mithat Sancar to discuss the importance of the U.S.-Turkey ties, according to a tweet by the U.S. Embassy in Ankara.

Today, Mevlut Cavusoglu will chair the second meeting of the Joint Committee of the Palestinian and Turkish foreign ministries, which was established in 2010. He will then hold talks with his counterpart, Riyad al-Maliki, and Palestinian President Mahmoud Abbas. On Wednesday, he will pay an official visit to Israel and meet with Foreign Minister Yair Lapid, also the country’s alternating prime minister, and exchange views on bilateral relations and regional and international matters.


The number of road motor vehicle registrations rose by 21.4% to 118,974 in April, compared to the previous month, according to the Turkish Statistical Institute.

The net international investment position posted USD 227.5bn deficit in March, according to the Central Bank.


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