When we look at the general perspective of USD/TRY parity, we could observe the strong positive trend on the global forex market. The starting point was at 3.0214 at the beginning of year. Until the end of October, there was a bit positive – horizontal trend on USD/TRY parity indeed. So, we were observing some sales pressure at different time intervals on the parity. With starting the month of November, the parity started to record a strong increase, reached 3.44 level at 20th November. The strong positive trend had continued until the end of the year. The parity was continuing its trend on 3.40 level at the last days of the year.
In the US, the dollar rally, which started with the economic policies promised by Donald Trump after the presidential victory, is the FED's interest rate increase in December, with the interest rate hikes in 2017 strengthening with Trump, while the USD’s strong rebound in long term that are important factors in increasing the strength. The most affected currency was the Turkish Lira. When we look at the trends especially after the month of August, we see that we are in a significant negative position relative to other developing country currencies.
The rhetoric of President ErdoÄŸan's meeting with Russia, Iran and China, and the fact that the trade is carried out in the local currency may lead to the opening of new pages in foreign trade. Usage rate of TL in foreign trade is over 6%. The use of TL in foreign trade will be particularly advantageous against the countries that we give foreign trade deficit. We give foreign trade deficit against Russia, which is an important trading partner. If the payments to be made to Russia are in TL terms, they will reduce the demand for the USD. However, the important constraint here is that Russia will not accept it. This will require strong diplomatic relations. All of these developments will continue to support TL in the short term. The steps to be taken in foreign trade and the policies of the Turkish Central Bank will be decisive for the spread of the TL appreciation to medium and long term.
When we look at the first forecasts of 2017 about USD/TRY parity, there would be a positive trend. The main support level will be 3.4240 and the main resistance level will be 3.5000 on USD/TRY parity for the first days of 2017.
- Date: 17 December 2016 Sat 22:15
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