Economy in Turkey: Dollar/TL rate continues to rise before TCMB decision on interest rate

The dollar exchange rate started the week at 26.18 TL. The euro started at 29.4129 TL. This week, eyes will be on the interest rate decision that the Central Bank will announce on Thursday. It is considered certain that the Central Bank will raise interest rates.

The Central Bank of the Republic of Turkey (CBRT) had increased its policy rate from 8.5 percent to 15 percent at its last meeting. The CBRT had stated that they were focusing on reducing inflation in their new period. The CBRT Chairman also announced that they were focusing on reducing inflation in the new period. Economists participating in the survey organized by AA Finans expect the CBRT to raise the interest rate by 250-650 basis points to 17.50 percent to 21.50 percent.

As per reports shared by the authority, the reserves of the Central Bank continue to increase. Reserves are increasing after the CBRT stopped selling from the reserve to rein in the dollar /TL exchange rate. In the week of July 7, it increased by $ 1 billion 829 million compared to the previous week and reached $ 110 billion 416 million. Its net international reserves totaled $13.17 billion, an increase of $3.3 billion in the week of July 7.

Mehmet Simsek had made following announcement last week; “We are working rapidly to continue rational policies that will contribute to the reserve increase of the Central Bank”.