7.20 Looks like the perfect opportunity to "buy the dip"
Updated
Erdoğan has dismissed the Central Bank Governor Naci Agbal, to impose his counter views on monetary policy on lower interest rates. Naci Agbal had lifted the policy rate to 19% and in response US currency has retreated to 7,2 level.
I have marked the history of changes in Turkish Central Bank Government and some significant policy rates in yellow callout boxes. First thing to be noticed is the frequency of the CB Governor changes, recently Naci Agbal had governed only for 4 months, previous one around 1 year. In CB history the expected average is around 5 years.
Second you have to notice how Naci Agbal's appointment dramaticly effected the rise of USD/TRY. He has reversed the uptrend from 8,6 level to the lowest low of 6,9.
The new CB Governor is from an islamic economy background and he is strictly against high interest rates, so we should expect the policy to gradualy lower the rates.
Regarding the internal political contiditions and several negative economic facts, 7,2 level looks like the perfect dip to buy.
I have marked the history of changes in Turkish Central Bank Government and some significant policy rates in yellow callout boxes. First thing to be noticed is the frequency of the CB Governor changes, recently Naci Agbal had governed only for 4 months, previous one around 1 year. In CB history the expected average is around 5 years.
Second you have to notice how Naci Agbal's appointment dramaticly effected the rise of USD/TRY. He has reversed the uptrend from 8,6 level to the lowest low of 6,9.
The new CB Governor is from an islamic economy background and he is strictly against high interest rates, so we should expect the policy to gradualy lower the rates.
Regarding the internal political contiditions and several negative economic facts, 7,2 level looks like the perfect dip to buy.
Note
Currently Turkish banks' weekend rate for USDTRY. BUY : 7,7125 TL SELL : 8,4875 TLUSDTRY is priced 8,25 in the asian market with a %13 increase on the last price.
Market will open with a significant gap.
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