First 2017 Signals of USD / TRY Parity

The U.S. Dollars/Turkish Liras parity is one of the most impressible parities of the world from the latest financial and political developments in both countries like the USA and Turkey. The parity has tried a lot of records through the upward direction at the end of 2016. After that, with the beginning of 2017, the parity broke a new record on the global forex market. The parity reached over the 3,64 level on the market. The higher inflation rates which came over the expectations, and prolonging the state of emergency condition are affecting the strong negative conditions on Turkish economy. Inflation was at 8.53 % above market expectations, and the Central Bank of the Republic of Turkey failed to meet its target again.

A consensus that the CBRT will be growth oriented and can not raise interest has begun to increase its weight because of the pressure on it not to increase its interest rates. The local political developments are affecting negatively to the parity. In the regions where state of emergency is located, some traders are not technically capable of investing. For this reason, the rising risks ahead of the Fitch note continue to push upward. Fitch's credit note will be released on January 27th. The chances of downloading notes are quite high. Terrorist incidents are not the only criterion at this point. Although Turkey seems to have no trouble with the budget, it is possible that the decisions taken in the last ECO will put a serious burden on the budget. For this reason, Fitch may take this into consideration.