The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) dropped by $3.66/mt to $423.75/mt cfr on Tuesday on further weakening of the lira.
Turkey’s President Recep Tayyip Erdogan fired the deputy governor of Turkey’s central bank on Tuesday, 10 days after dismissing the governor of the central bank in response to a larger than anticipated interest rate increase.
Markets responded today by letting the Turkish Lira drop to levels past TRY8.3 against the US dollar, which is a 13pc weakening from levels of TRY7.2-7.3 against the dollar at the start of the month.
Media agencies reported that the new central bank governor, Sahap Kavcioglu, signaled this week that markets should not presume he will cut interest rates when he sets monetary policy for the first time in April.
Tuesday’s dismissal of the central bank’s deputy governor and comments by its recently appointed governor have stoked uncertainty in Turkey and its steel mills have become apprehensive about booking new orders given the volatile exchange rate.
Most market participants said that while some sellers continue to offer heavy melt at $430/mt cfr, price levels of $420-425/mt cfr seem to be more realistic in the current environment.
Given the lira’s weakness, Turkey’s mills raised daily domestic spot rebar prices by TRY150-180/mt ($18-21/mt) to TRY5,950-6,000/mt ex-works on Tuesday.