It was an uneasy weekend starting with late night (early morning) presidential decrees on Saturday including news on replacement of the central bank government (again!) and Turkey’s withdrawal from the Istanbul Convention on women’s rights. The day continued with the news on taking over of Gezi Park from Istanbul Metropolitan Municipality. Each of them may be discussed separately with their pros and cons but picture it gives is a country taking important decisions on delicate issues with a decree on a weekend… Economy, society and urban life, each of them important for the prosperity of the whole nation at the end of the day, was the main subjects of these late-night decisions…
Appointment of the new central governor itself, meaning the fourth governor in 20 months, made shock waves in the markets. The dismissal of Naci Agbal, who was seen as a symbol of the return to orthodox policies, may damage credibility, loss of value in TL and a possible payment problem, according to foreign analysts. On the other hand, it is also among the spoken possibilities that Agbal can take office in the government again and this may calm the markets. We will see the broader effects of this decision during the week but let’s have a look at the first reactions.
Although the new governor Sahap Kavcioglu, an ex-AK Party MP, held a last-minute meeting with senior bankers on Sunday to make a soft start to the week, lira started to depreciate with the opening of the Asian markets in the early hours today.
USD/TRY started the week with over 15% increase and saw 8.47 in the midnight. In the meantime, EUR/TRY exceeded 10.00 and GBR/TRY reached all time high at 11.74. As of this morning, foreign exchange rates have slightly decreased. USD/TRY is balanced at around 7.79, while EUR/TRY fell below 9.30.
On the other hand, spot gold is traded at USD 1,730 and brent crude stands at USD 63.79 in this first trading day of the week.
On the political side, AK Party will complete the 7th Ordinary Congress process with a big convention to be held this week. Nearly 70% of the party organization is expected to be renewed. The change is anticipated to be reflected also on the party administration and the Cabinet.
DAILY AGENDA
Turkish Statistical Institute will release Labor Force Statistics.
The Ministry of Culture and Tourism will release arrival and departure figures of foreigners and citizens.
