No need to look further for the reasons why USD/TRY has suddenly dropped yesterday. Statements covering that the pastor crisis will end soon, good news about the syndicated loans and so on. In the meantime, President Erdogan’s US and Germany visits brought new hopes to Turkish business world.
To be honest, I do not have high expectations from the US summit, but happily, I do not have big concerns for Germany visit. As I have mentioned last week, the office of the Chancellor is putting their best efforts to prevent any kind of problem from occurring during President Erdogan’s visit. Now, let’s talk about what we should expect from the upcoming UN summit:
Prof. Dr. Çağrı Erhan, President of Altınbaş University also an academic expert on the United States, gives the following details regarding the UN Summit: “Tomorrow, world leaders are going to address to the UNGA at the 73rd session of the UN General Assembly. Scheduled to speak from the high rostrum of the UN on the 25th of September, President Erdoğan is expected to emphasize the importance of multilateral efforts to end the war in Syria and bring stability to the country. He is also expected to repeat again the reasons why FETÖ is a great threat to world peace and ask for international cooperation to fight back against this terrorist organisation. President Erdoğan is also to underline the fact that how it is important for world governments to take the necessary measures to respond to the world’s humanitarian crises while drawing world’s attention to risks the Palestinians are currently facing…”
The theme for the general debate of the 73rd session of the General Assembly is “Making the United Nations relevant to all people: global leadership and shared responsibilities for peaceful, equitable and sustainable societies”. But, it seems quite strange to me that the US President is going to chair UN Security Council meeting on September 26 considering such a beautiful and peaceful theme. Threatening to cut aid to UN members over Jerusalem vote, Trump is to chair a meeting with the “global leadership and common responsibilities”! I guess UN members did not turn Trump down knowing that the United States pays %22 of UN costs. For further details, I suggest you to read Prof. Erhan’s columns in Türkiye Newspaper.
“As Fed decision approaches…”
By the way, the Fed FOMC convenes on 25-26 September. Everyone expects the Fed to hike rates in their September meeting as the Federal Reserve has hiked rates only twice since the beginning of the year. Having started to raise rates for the first time in ten years in 2015, the Fed might exceed the target inflation until the end of the year.
After CBRT’s pretty drastic rate hike, I do not think that any other hike move from the Fed will not bring any significant negative impact on Turkish Monetary and Capital Markets, except for the USD/TRY parity, of course. However, the fact that this move may cause the cost of international funds rise further is not a positive development for the future indeed.