Here are 3 reasons for Türkiye’s stable currency, falling dollar demand
![Here are 3 reasons for Türkiye’s stable currency, falling dollar demand 1 Here are 3 reasons for Türkiye’s stable currency, falling dollar demand](https://i.turkiyetoday.com/image/resize/640x427/wp-content/uploads/2024/07/kklkll.jpg)
Türkiye’s tight monetary and economic policies continue to yield results – particularly in curbing foreign exchange demand.
Most recently, the current account balance for June recorded a surplus of $407 million every month.
The annual current account deficit has narrowed to $24.8 billion.
This recovery in the current account balance is easing the pressure on foreign exchange rates.
Dollar rate on Aug. 14, 2024
In the interbank market, the dollar started trading at ₺33.53 on Aug. 14, 2024. In the Grand Bazaar, exchange offices are operating with a buying and selling a range of ₺33.43-₺33.53.
In today’s trading, the resistance level is observed at ₺33.58, while support is at ₺33.46. The Euro opened at ₺36.84.
Overnight interest rate falls
Türkiye’s CDS risk premium stands at 276, while overnight interest rates have fallen below 50% again as of yesterday. After climbing to 52.96% last week, overnight rates dropped to 49.97% yesterday.
The recent calm in U.S. stock markets and the Japanese yen has also reduced stress on domestic interest rates and foreign exchange markets.
Economy expected to slow down
Meanwhile, policies aimed at curbing demand and controlling inflation are also leading to a decline in imports.
Coupled with a decrease in industrial production, this trend suggests that Türkiye’s economy could contract by 1% in the third quarter of the year.
In light of this scenario, the likelihood of the central bank cutting interest rates in November and December is expected to increase.