What Will the Dollar Exchange Rate Be at the End of 2020? According to the Central Bank’s survey studies, the projected dollar exchange rate for the end of 2020 has been released following evaluations. In the Central Bank’s Expectations Survey, the year-end consumer inflation (CPI) outlook rose from 10.01% to 10.06%. In the previous survey period the expected year-end dollar rate stood at 6.41 TRY, while the latest survey raised that expectation to 6.45 TRY.
In the Central Bank’s Expectations Survey, the current year-end CPI expectation moved from 10.01% in the prior survey to 10.06% in the most recent one. The 12-month CPI expectation was 9.54% in the previous survey and increased slightly to 9.61% in this survey period. The 24-month CPI expectations in the same comparison were 8.51% and 8.52%, respectively.
Dollar/TRY Expectation Rose, Interest Rate Expectation Fell
The Dollar/TRY expectation rose while interest rate expectations decreased. According to the survey, the year-end exchange rate expectation was 6.41 TRY in the prior period and moved to 6.45 TRY in the current period. The 12-month-ahead exchange rate expectations were recorded as 6.43 TRY and 6.51 TRY over the consecutive survey periods.
Real GDP growth expectations for 2020 were 3.4% in the previous survey and edged up to 3.5% in the latest survey. For 2021, growth expectations were set at 3.7% and 3.8% in the respective survey rounds.
The year-end overnight interest rate expectation in the Borsa Istanbul (BIST) repo and reverse repo market fell from 11.43% in the prior survey to 10.83% in the current survey. The Central Bank of the Republic of Turkey’s weighted average funding cost month-end current expectation moved from 11.31% in the previous survey to 10.91% in this period.
The Central Bank’s one-week repo auction rate month-end expectation was recorded as 11.53% in one survey period and 11.02% in the following period. For government debt securities (DIBS) with around five years to maturity, the 12-month-ahead secondary market annual compound yield expectation decreased from 10.75% in the previous survey to 10.40% in the current one. For DIBS with around ten years to maturity, the 12-month-ahead secondary market compound yield expectation moved from 10.77% to 10.51% across the same survey periods.