The central bank announced that it intervened by selling foreign currency due to “unhealthy price formations”. With what was done today, the fourth intervention in December took place. The lira had renewed its record low today, above the 14-currency level against the dollar, and started the day with high volatility.
At this point, it is difficult to analyze the perspective of the Central Bank on the verge of intervention and what actions it takes. Based on previous interventions, we expected a new intervention due to the exchange rate levels and volatility seen today morning. Here is what needs to be understood: From the places where the exchange rate fell, like the intervention on Friday, the new rise is more than enough, and after the intervention is over, we generally see the rate above the previous levels. Therefore, we believe that it is necessary to analyze the main motive of the movement in the markets and to neutralize the main factors that depreciate the lira. The current USDTRY movement also has a direct relationship with the interest rate. A new rate cut is priced in the CBRT meeting to be held on Thursday, and we are getting the signal that the economic imbalances that have arisen are not a criterion for policy transformation at the moment.
On the adequacy of reserves; The Central Bank does not have a significant usable reserve and is currently negative in terms of its leanest net reserve position. Therefore, we do not think that it will have a net effect, even if there will be continued intervention in the market from the unconventional point. After the intraday effect of the Central Bank's interventions wears off, eventually the upward movement of the exchange rate will probably continue on the main plane and the market will take the interest rate decision on Thursday. A new rate cut and the continuation of interest rate cuts, at least, today in line with the Minister of Treasury and Finance, Mr. Nureddin Nebati's statement that "we will continue to cut interest rates" shows this.
Under normal circumstances, although the traditional monetary policy and economic approach requires policy tightening, we observe that this is not the demand and target of the government at the point of the new economic perspective. Therefore, we do not expect an action such as a reversal of the "interest rate cuts" discourse or a U-turn in politics in the near future. In this context, the economy management will particularly want to observe the effects within the framework of export growth and stabilization of the current account balance, which removes the possibility of a rate hike in the first months of the year. It is difficult to predict the levels the USDTRY may go to during this time.
Kaynak: Tera Yatırım
Hibya Haber Ajansı
