We woke up the day with a devaluation in the Turkish Lira. President Recep Tayyip Erdogan’s statements on the interest in a televised interview with state broadcaster TRT perceived as a possible rate cut by the markets. Erdogan said that the country needs to lower interest rates and that he had a talk with the Central Bank Governor on the issue. Lowering the interest rate can lift the burden on investments and costs, according to President Erdogan. “We need to see July, August for interest rates to start coming down,” he added.
Markets immediately reacted to his words and USD/TRY hit all-time highs by 8.81 yesterday following his statements. After the fluctuation USD/TRY gradually declined and was balanced between 8.60-8.65 at midnight. USD/TRY keeps the same level this morning. EUR/TRY also followed the same course and broke another record at 10.76. EUR/TRY and is currently traded at 10.52.
The issue is expected to be the main agenda of the Central Bank’s online ‘Investor Meeting’, at which the questions by investors will be answered today at 2.00 pm.
Investors started to lose interest in gold after the yields of the U.S. Treasury bonds rose to 1.62 and the risk appetite increased. Spot gold dropped below USD 1,900 per ounce. Brent crude exceeded USD 70 per barrel.
DAILY AGENDA
The international credit rating agency S&P will organize the ‘Effective Tools for Sustainable Development in CIS Countries and Turkey: The Islamic Finance and Sukuk Markets’ webinar (11.00 am).
Trade Minister Mehmet Mus will announce preliminary foreign trade statistics (11.30).
The Central Bank will release the Foreign Exchange Assets and Liabilities of non-financial companies (2.30 pm).
The Central Bank will hold an online meeting within the scope of the bank’s ‘Investor Meetings’ program (2.00 pm- 4.00 pm). The bank will answer the questions of investors.
The National Security Council will convey under the presidency of President Recep Tayyip Erdogan.
The legislative proposal on restructuring some receivables and amendment of some laws will be discussed in the Parliament.
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