Economy in Turkey: Experts explain why stock market rises while TL melts

While the TL is at historic low levels, the rise that started with the appointment of the new economy management in Borsa Istanbul is continuing. Experts speaking to media report that the positive atmosphere that has come with the new economy administration is priced on the market. However they also draw attention to the risks.

While the Turkish lira is at historic lows against the dollar, Borsa Istanbul continues to trade at a premium due to the impact of the new economic management.

At the opening today, the BIST 100 index started the day with 5,515.87 points, gaining 127.07 points and 2.36 percent compared to the previous close.

INDEX SEES PEAK OF LAST 5 MONTHS

The BIST 100 index, which carried the upward trend for the fifth consecutive day during the day, has gained close to 4 percent since yesterday’s close and has seen the top of 5 thousand 600 points in the afternoon trading. Thus, the index has seen the peak of the last 5 months.

With the sharp increase in the dollar / TL exchange rate, the shares of companies with an increased foreign exchange position and foreign exchange holdings also rose during the day. The stocks of companies with excess foreign currency in their coffers have been at a premium today more than other stocks.

RALLY IN STOCK MARKET

So why did the stock market start to rise after the elections?

The messages given by Mehmet Şimşek after he took office as the Minister of Treasury and Finance and the expectations about the future had an impact on the rise in the stock market.

Treasury and Finance Minister Mehmet Simsek said ”Turkey has no choice but to return to a rational basis.” The markets interpreted these statements as the first signals of the transition to traditional policies in economic policies.

After the change of duties, the markets began to wait for changes in the management of the Central Bank (CBRT), regulatory agencies, the Turkish Wealth Fund and public banks. On the other hand, the CBRT’s interest rate decision on June 22 will also play an important role in the impression of the markets about the future.