Dollar/TL close to historical peak

In the Istanbul free market, the dollar, which was bought for 33.5270 lira, is being sold for 33.5290 lira. The selling price of the euro, which was bought for 36.6510 lira, was determined as 36.6530 lira.

On Friday, the selling price of the dollar was 33.5360 lira, while the selling price of the euro was 36.6370 lira.

Last week, the USD/TL exchange rate reached 33.67.

SALES PRESSURE

TL continues to be under selling pressure due to the search for a global safe haven. This week, the domestic data agenda is intense and expectations for a US interest rate cut are prominent in global markets.

Today's domestic agenda will focus on the June unemployment figures and the first issue of the Treasury's new two-year benchmark bond. President Tayyip Erdoğan will also chair his party's Central Executive Committee meeting.

Tomorrow, the data agenda will follow the June balance of payments statistics and July housing sales. The rest of the week will be busy with the July budget and the Central Bank (TCMB) market participant survey.

Investors are awaiting data from the US and China for clues about global economic growth.

The Central Bank of Korea and the Bank of Korea announced that they renewed the swap agreement for approximately $1.7 billion in local currency for three years.

After rising to a new peak of 33.67 last week due to global selling pressure, the USD/TRY started the day around 33.53 this morning. The TL lost 1.1 percent of its value against the dollar last week.

CBRT MESSAGES

The CBRT, on the other hand, conveyed its message in its inflation report last week by focusing on the fact that the tight stance would be maintained “determinedly” until price stability was achieved.

TCMB Governor Karahan stated that “a tight stance will need to be maintained for a long time” but that this does not mean that there will be no interest rate cuts, and emphasized that the tight stance will be maintained in the interest rate cut as well.

Before these statements, the median expectation in the markets was that interest rates would be cut by 500 basis points before the end of the year. Estimates in the Reuters poll, which are increasingly focused on the upcoming year, indicate that interest rate cuts could reach 2,250 basis points by the end of 2025.

THE LIQUIDITY SURPLUS ENDED LAST WEEK

Overnight interest rates and excess liquidity were being closely monitored in the domestic market. TCMB data showed that excess liquidity had ended as of last week. In this process, intraday additional TL deposit purchase auctions and reverse swap auctions with local banks were effective.

Excess liquidity was eliminated after reaching approximately TL 400 billion. As of Friday, the liquidity deficit of the banking system exceeded TL 50 billion. The overnight interest rate fell to 47.02 percent and is now at 52.37 percent as of Friday.