Limited volatility continues between Dollar and TL: How much were the Dollar and Euro today, compared to TL

TRY fluctuated in a narrow band, reflecting the risk aversion in emerging market currencies, mostly driven by the elections and expectations of global interest rate hikes.

Publication: 11.06.2024 - 14:00
Limited volatility continues between Dollar and TL:  How much were the Dollar and Euro today, compared to TL
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While Asian stock markets declined, far-right gains in the European Parliament and the decision to hold early elections in France raised concerns about the political future of the EU.

Following yesterday's poll in France, which indicated that the far-right National Union (RN) could win early elections even if it does not win the majority, government bond yields in almost all European countries rose, and the difference between France's and Germany's government bond yields widened significantly.

While the dollar rose to a one-month high against the euro and a one-week high against the yen, investors will be watching the CPI data to be released tomorrow in the US and forecasts for interest rate cuts the following day.

On the domestic agenda, Treasury auctions will be held today, while there is no data to follow.

Treasury will reissue four-year TLREF-indexed and four-year fixed coupon bonds.

Stating that it will support the CBRT to withdraw liquidity from the market if necessary, the Treasury increased its borrowing forecast for this month by 37 billion TRY to 254 billion TRY and increased its July forecast by 19 billion TRY. The Treasury borrowed around 130 billion TRY before today's auctions.

The Treasury will complete its monthly program with two gold-denominated direct sales this Thursday.


The Turkish lira was almost unchanged against the US dollar in April and May. As of last week, TRY fluctuated first with the election results in the related countries in the emerging market basket and then with the US employment data on Friday.

TRY experienced its first depreciation and foreign position closures in more than 2 months after the local elections twice last week.

The volatility continued yesterday around political developments, albeit in a narrow band. Emerging market assets depreciated yesterday amid the political uncertainty created by the European Parliament elections and the elections in Mexico.

The exchange rate was at 32.35, the midpoint of quotations, as of 08.44 this morning. Almost none of the depreciation in TRY was permanent. Euro TL is trading in the 34.93 band.

Traders said that the TL has just started to reflect the inflows and outflows of emerging market currencies in a similar way, which is a healthy move.

The flat course of the USD/TL exchange rate and the relatively high yield of the TL, thanks to the CBRT's net foreign exchange purchases, continued to keep the attractiveness of the TL high for both foreign and domestic investors.

According to bankers' calculations, CBRT's net reserves excluding swaps rose to $6 billion last week. Net reserves excluding swaps had turned positive for the first time in four years with $1.5 billion on May 31. While bankers calculated the change in the last week ending June 7 as an increase of 4.5 billion dollars, the increase in the last 10 weeks following the local elections was approximately 72 billion dollars.

According to the bankers' calculations, the CBRT's net international reserves increased by about 2 billion dollars last week to 47.5 billion dollars. Total reserves were calculated at 146 billion dollars with an increase of 2.5 billion dollars.

The CBRT also reduced the ratio of the obligation to sell export proceeds and foreign currency-earning service revenues to the CBRT from 40 percent to 30 percent with the implementation that started yesterday.

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