Post-election currency trends: TL remains stable despite expectations
Despite pre-election forecasts, Turkish lira remains steady, with companies and citizens shifting focus toward domestic currency amid stable market conditions
Two trading days after the elections, significant price fluctuations are underway, particularly in the currency markets. Anticipated trends similar to last year's surge during the general election were expected, prompting adjustments.
However, the lack of movement in currency prices has surprised many. The dollar, which closed at ₺32.43 on the last trading day before the elections, depreciated by roughly 1% by midweek.
April 3 dollar and euro exchange rates
In the free market, the dollar is being bought at ₺32.0290 and sold at ₺32.0310. The selling price for the euro stands at ₺34.5090 for buying and ₺34.5110 for selling.
In early March, the gap between the Central Bank of the Republic of Türkiye's rates and those of exchange offices widened by up to ₺1 due to panic buying, with selling prices nearing ₺33.50 in exchange offices. Those who bought physical currency at these levels are now at a loss seeing Wednesday's prices.
President Recep Tayyip Erdogan, economic authorities, and the central bank president's affirmations that current economic policies will continue in the planned period have played a significant role in reducing tension in the foreign exchange market post-election.
Foreign exchange rates have come under pressure since the beginning of the week due to positive foreign reports and the start of foreign capital inflows. In response to high credit costs, companies have started selling dollars for Turkish lira needs. Citizens are also turning to exchange offices to sell foreign currency in favor of high returns in Turkish lira.
Eyes on inflation figures
Combating inflation has become the primary objective of the new economic era. As a result, close attention is being paid to the outcomes of the measures implemented to address inflation. On Wednesday, the Turkish Statistical Institute (TurkStat) will announce inflation figures for March. Expectations suggest a 3.5% monthly increase in the Consumer Price Index (CPI). Figures that align with expectations will be positively received.
In January and February, the CPI stood at 6.7% and 4.53%, respectively. The Istanbul Chamber of Commerce announced that the inflation rate for March was 3.93%.
Structural reforms remain vital
Economists evaluating the local election results and the post-election period state: "Voters sent a clear message against high inflation and living costs. So, current economic management isn't the focus; instead, it's strengthened. Yet, tight policies might affect investments and employment. Besides monetary policy, implementing structural reforms, especially by the central bank and TurkStat, is crucial now."
