“Exchange rates rise with expectation interest rates will not increase in Turkey”: Experts

Experts in Turkey’s finance sector say that the main factor in the rise of US Dollar against Turkish Lira is the expectation that Turkey’s Central Bank will raise interest rates. They also comment “The measure taken by Central Bank today will mean that the average cost of funding which had previously been 12% will be moved to around 12.25%. This has caused some downward movement, but it is doubtful to be permanent.”

Experts also say the political environment (flow of news), uncertainty about the case of Turkish gold trader in the USA and criticism forwarded at the policy of the Central Bank are the main elements of the pressure on the Turkish Lira.

It is also commented that the steps taken by the Central Bank against the rise in the last period have not been enough and the expectation that the Central Bank may continue without raising interest for a certain period of time seems to be the main factor for the upward movement of US Dollar.