Dollar and Euro renewed their peak! How much are Dollar and Euro worth today? Foreign exchange prices as of February 29, 2024

Today, TurkStat will publish gross domestic product data for the last quarter of 2023 and the whole of 2023. CBRT will announce the Monetary Policy Committee (PPK) summary, weekly and monthly banking sector data, and weekly CBRT reserve data.

The Treasury’s three-month domestic borrowing program will also be announced today.

Despite the devastating earthquake of the Turkish economy and the slowdown in trade markets, it is expected to grow by 4.3 percent in 2023, led by domestic demand, and to slow down to 2.9 percent in 2024 with the effect of the transition to strict policies.

The 2023 gross domestic product (GDP) growth forecasts of 30 economists participating in a Reuters survey are between 3 percent and 5.3 percent. While the median growth expectations for the last quarter are 3.5 percent, the forecasts are in the range of 2.4 percent to 4.7 percent.

Dollar TL started the day at its new historical peak at 31.30 in the Forex markets, continuing its gradual upward trend since September 2023. According to these data, TL lost 2.7 percent of its value against the dollar in January. The loss of TL against the dollar since the beginning of the year has been 5.4 percent. Euro TL renewed its record with 34.09.

DECREASING TREND IN RESERVES CONTINUES

The downward trend in CBRT reserves that started with the new year continues. According to bankers’ calculations, net reserves fell by nearly $6 billion last week. Net reserves, which rose to 40.09 billion dollars on December 22, the highest level since January 2020, will have decreased by approximately 17.5 billion dollars in the past two months, when bankers’ calculations are included.

Personal consumption expenditures data will be prominent in the USA today. Personal consumption expenditures (PCE) data is expected to provide new clues about when the US Federal Reserve will start interest rate cuts.

Last week, the CBRT stated that the monetary policy stance would be tightened if a significant and permanent deterioration in the inflation outlook is predicted. CBRT also signaled that the policy rate will be kept at the current level for a longer period of time.

In the MPC text, it was pointed out that the “determined stance” in monetary policy will continue to contribute to the “TL real appreciation process”, which is one of the main elements of disinflation.

Stating that the CBRT also gave the message “do not expect an early interest rate cut” with its emphasis on monthly inflation, bankers will monitor the changes in interest rate cut expectations.

LIQUIDITY SURPLUS IS DECREASING

Liquidity surplus in the banking system decreased to approximately 14 billion TL as of yesterday. Last week, liquidity surplus was around 200 billion TL. Since last year’s general elections, the CBRT has withdrawn over 1 trillion TL of liquidity, primarily through required reserve steps. In its last interest rate decision, the CBRT stated that it would monitor the ongoing effects of the current liquidity steps.

Excess liquidity is closely monitored because it can prevent the full impact of monetary tightening from being reflected in the market.