Dollar rates remain stable at ₺32.25 on May 29

On May 29, the dollar rates started the day at ₺32.25 in the interbank market, while foreign exchange bureaus traded between ₺31.97-₺32.09.

While domestic and foreign investors swiftly switched to the Turkish lira, the monthly return on bond mutual funds reached 6%, surpassing deposit and money market funds and offering investors the highest return.

Overnight interest rates rose to 53% on Monday and are 52.24% as of today (May 29). The Turkish central bank emphasizes overnight rates remain above the 50% policy rate, ensuring the monetary transmission mechanism functions properly and providing further support to the Turkish lira.

The decision to increase the required reserve ratios was made last week.

Dollar rates on May 29

The dollar market continued to sail in calm waters. The dollar, which fell below ₺32.00 in the interbank market at the beginning of the week, started May 29 by trading close to ₺32.25. Exchange offices maintain prices in the range of ₺31.97-₺32.09  in buying and selling.

Turkish lira’s current situation

Given the stable trend in foreign exchange rates and gold, along with the risks associated with the stock market, savers have turned to Turkish lira instruments in search of higher returns.

Today, Turkish lira deposit interest rates offer an average annual return of around 52%, indicating a monthly gross return of 4.35%. In money market funds, returns over the past month have ranged between 4.35% and 4.00%, influenced by liquidity abundance and the decrease in overnight interest rates.

Notable developments are observed in bond-investing funds. As bond yields decline, those who purchased these bonds at higher rates earlier benefit from higher returns. In Türkiye, the yield on the 2-year benchmark bond rose to 45.30% at the beginning of May.

However, with substantial foreign bond investments, the benchmark yield has fallen to 41.45% today. This decline has resulted in higher returns for bond-investing funds over the past month.

Monthly return reached 6%

In bond funds, known as “Debt Instruments Funds,” the highest monthly return has reached up to 6%. The top five other funds have also achieved monthly returns ranging from 4.60% to 5.30%.

According to data released by the Central Bank of the Republic of Türkiye (CBRT), approximately $5.65 billion from foreign investors poured into Turkish bonds in the four weeks before May 17.

This substantial inflow, coupled with the approaching period of decline in the Consumer Price Index (CPI) because of the base effect, contributes to the decrease in bond yields.