Even watching the “Dollar rises, Dollar falls” news all day long makes me feel tired. I wonder how those covering the news must feel.
As the US trial involving both Turkey and some other countries in the region approaches, I see nothing but those who commentate on this matter whenever I turn on the television. One of the most substantial scenarios regarding the trial is that some Turkish banks could face big fines over alleged violations of sanctions.
In such a case, we must expect a decline in BIST index, for BIST’s up/down movements is closely associated with bank stocks. It is inevitable that USD/TRY and interest rates will be affected. Also, get ready to hear statements like “We are reviewing the court decision. We will carry on with our operations” from the relevant banks. This decision, however, won’t be made hastily. We may have to wait a few months to see the final decision.
Tensions may escalate and market fluctuations may increase as the names of those who could face criminal charges leaks to the media over the course of the trial. Although the final verdict will be given by the jury and the judge, it won’t be very easy to prevent speculations until the last day of the trial.
That being the case, I think it wouldn’t be very realistic to expect USD/TRY and interest rates to remain calm. As I have always said, investors are no longer looking for the “stability”. They are looking for the “future”. Investors prefer to trade or make transactions without tying too much money into market, especially in economic climates where the future looks obscure and dark.
For that reason, we must get ourselves ready for the times of high volatility.