Investors Eye Moody’s Rating Update and Central Bank’s Record Reserve Levels
The dollar and euro exchange rates against the Turkish lira have shown significant movement today, with the USD/TRY trading around 33.05 and the EUR/TRY at 36.02. As the week concludes, investors are closely monitoring Moody’s potential rating update for Turkiye. Moody’s currently rates Turkiye at “B3” with a positive outlook, with expectations of at least a one-notch upgrade, and some forecasts predicting a two-notch increase.
In a remarkable achievement, the Central Bank of Turkiye’s total reserves surged by $5.348 billion, reaching an all-time high of $153.796 billion. Meanwhile, foreign investors have purchased over $10 billion in Turkish bonds since the start of the year, including $895 million last week, while selling approximately $58 million in equities.
Last week saw a significant outflow of ₺49 billion from currency-protected deposits (KKM), marking the fastest weekly decline since February. In a strategic move to bolster the share of lira deposits in the banking system, the Central Bank has reduced the minimum interest rate on KKM to 35%, effective Monday. This initiative aims to encourage the transition from KKM to traditional lira deposits and reduce the reliance on KKM accounts.
Market Reactions and Global Impact
Global markets have been negatively impacted by escalating US-China trade tensions and uncertainties surrounding the US presidential election. Additionally, a software disruption from CrowdStrike, a cybersecurity service provider for Microsoft, has led to significant interruptions in aviation, banking, and financial services worldwide. Consequently, CrowdStrike’s shares plummeted by 18%, while Microsoft’s shares experienced a decline exceeding 2%.
Source: NTV / Prepared by Irem Yildiz