Markets

Volatility indicators in Dollar / TL are decreasing

In July, while the lira was trading within a narrow 1% band against the dollar, volatility indicators fell sharply. The 3-month implied volatility of the Dollar / TL, which has been falling continuously for the last 9 days, has dropped to the lowest level since February.

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The implied 1-month volatility has also returned to its February level as a precedent. According to Erkin Işık, economist of QNB Finansbank, the options market is pricing in “the exchange rates will calm down in the coming months as the demand for foreign currency slows down in the domestic market and the current account deficit and external debt payments will decrease in the summer months”.

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Related news:

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  • BofA’s new interest rate expectation for the CBRT
  • New dollar/TL estimate from UBS
  • Buyback wave in the stock market, which saw historical discounts in dollar terms

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