Attention foreign exchange investors! How did Dollar and Euro start the day before the interest rate decision? Foreign exchange prices on April 25, 2024 – Last Minute Economy News

In TL, the main expectation is that the Central Bank (CBRT) will keep the policy rate constant at 50 percent today, while the markets will follow the messages in the Monetary Policy Committee (PPK) text.

Dollar/TL started the day close to the peak around 32.60. Euro is traded in the 35.01 band in TL. Risk aversion is strong in global markets.

Asian stock markets fell, following the decline in technology stocks, following the Meta balance sheet that was below forecasts. The rise of the dollar above 155 against the yen for the first time since 1990 strengthened the possibility of market intervention in Japan.

In the USA, the higher-than-expected March consumer price inflation postponed the expectations for when the Fed would start reducing interest rates.

TL started the day with a limited depreciation against the dollar this morning. The exchange rate was traded around 32.60 at 08.55. TL, which saw its most significant depreciation since July with 3.5 percent in March, lost limited value by 0.7 percent in the first three weeks of April. The depreciation of TL in the first quarter was 9 percent.

Today’s domestic data agenda includes BRSA weekly banking sector data, CBRT weekly money and bank statistics, foreign exchange reserves and securities movements.

CBRT net reserves are expected to decrease by over 6 billion dollars last week. However, bankers point out that the CBRT has significantly reduced its swaps with local banks in recent weeks, by $8 billion last week.

According to calculations, foreign exchange purchases, which exceeded 6 billion dollars on a weekly basis after the election, continued at this strength last week.

EYES ON THE INTEREST RATE DECISION

According to a Reuters survey, the CBRT is expected to keep the one-week repo rate constant at 50 percent in April, following the surprise tightening last month in order to control inflation, which is above expectations.

Almost all of the 14 economists who participated in the Reuters survey agree that the policy rate will be kept constant this month, but one economist is of the opinion that the policy rate will be increased by 500 basis points and another economist is of the opinion that the interest rate will be increased by 250 basis points. Therefore, an interest rate increase today may mean a surprise pricing for TL.

In the previous meeting held a week before the local elections, the CBRT took a surprise step by increasing the policy rate from 45 percent to 50 percent and widening the interest rate corridor. CBRT also gave the message that it was determined to disinflation.

Those who expect the CBRT to keep the interest rate constant today are of the opinion that the guidance of “the monetary policy stance will be tightened” in the case of a “significant and permanent” deterioration in inflation, which was included in the MPC text the previous month, will be preserved in the text.

CBRT President Fatih Karahan gave similar messages during his contacts in the USA. Karahan said last week that they had taken significant steps to control inflation expectations and were “ready to take more.” In the same speech, Karahan also said that the interest rate increase cycle has come to an end.

While geopolitical developments were also monitored in the markets, new economic steps that envisaged savings in public expenditures, which came to the fore with the statements of President Tayyip Erdoğan, began to be expected.