Latest dollar prices ahead of FED, CBRT decisions as controlled increase continues
Before the FED and CBRT interest rate decisions, the dollar price on March 20 started the new day at 32.38 TL
Amid efforts to curb the trend toward foreign currency, economists note that the 10% increase in the dollar since the beginning of the year has not provided protection against inflation or for TL deposits.
"It can be observed that the expectation stress on exchange rates has significantly eased after the elections," economists said.
With just one day until the critical interest rate decision of the Central Bank and eight business days until local elections, a limited increase in foreign exchange rates persists.
In yesterday's transactions, the dollar closed at 32.34 TL in the free market.
On March 20, the dollar price started at 32.38 TL for the day. The dollar is traded at 33.37 TL at the Grand Bazaar, marking a 1 TL difference from the free market.
Meanwhile, the Euro price on March 20 is also at 35.24 TL in the early hours.
CBRT March interest rate decision
The Central Bank's (CBRT) interest rate decision on March is expected to be announced on Thursday, March 21, at 2:00 p.m.. TCMB kept the policy interest rate at 45% in the previous meeting and is not expected to change interest rates after tomorrow's Monetary Policy Meeting.
Moreover, the Central Bank continues to intervene in the markets with various tools, such as actively applying additional blockages to required reserves and lowering credit expansion rates.
Deposit and loan interest rates
Along with these measures before the elections, TCMB aims to increase the effectiveness of monetary policy. With these applications, deposit interest rates have now exceeded 50% for all depositors in the 1-6 month maturity period.
Furthermore, interest rates for non-campaign consumer loans in public banks have increased to 4.89% for high amounts. Thus, the repayment of a consumer loan of 100,000 TL amounts to approximately 146,000 TL within a year.
Post-Election dollar trends
Economists noted that, following the recent measures resulting in increased loan costs and higher deposit interest rates, efforts are being made to prevent "market-disrupting" activities that create an artificial demand for foreign currency.
"The dollar started this year at 29.50. It has increased by about 10% in the past three months. During this period, the foreign exchange rate, which did not protect against inflation, also saw premiums below TL deposit yields. There is no picture to support a sharp rise after the elections."
Consumer Confidence Index for March
The "Consumer Confidence Index for March" will be announced today. This data could provide essential clues about how recent developments in the money markets are reflected in consumer confidence. The Consumer Confidence Index dropped from 80.40 to 79.30 in the second month of the year.
Developments below 100 in this index, which measures households' expectations for the next 12 months, indicate "pessimistic" expectations in consumer confidence.
Source: Newsroom
