Market Information Friday 27 January 2023

Turkey’s central bank said on Thursday it would provide support to companies that bring in foreign currency, including exporters and tourism firms. Firms can benefit from a 2% discount as conversion support when converting foreign currency if they pledge not to buy foreign currency for a period determined by the bank and deposit the remaining amount to conversion accounts as part of a scheme to protect lira deposits against forex depreciation, according to the central bank. Analysts have voiced concern that the practice could create a separate FX conversion rate to the trading rate in the free market.

The Pakistani rupee fell 9.6% against the dollar on Thursday, central bank data showed. Pakistan is facing an acute balance of payments crisis and is desperate to secure external financing, with less than three weeks’ worth of import cover in its foreign exchange reserves. The currency depreciation marks the biggest one-day drop in over two decades and may persuade the International Monetary Fund to resume lending to the country. The drop comes a day after foreign exchange companies removed a cap on the exchange rate, a key demand of the IMF as part of a programme of economic reforms it has agreed on.

The US economy grew by 2.9% in the fourth quarter, the US government’s first estimate showed on Thursday afternoon. 2.8% gross domestic product (GDP) growth was expected, following the 3.2% growth in the third quarter and the slight contraction in the first two quarters of 2022. Since March, the Fed has raised its policy rate by more than 4 percentage points, repeatedly in 0.75 percentage point increments in an attempt to reduce inflation. The GDP data are the latest sign that the economy has proved more resilient than expected in the face of significantly higher borrowing costs.

The 6M Euribor increased with 1 basis point to 2.93% compared to previous business day. The 10Y Swap increased with 3 basis points to 2.80% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.