TRY should not appreciate further and the Central Bank should start gradually cutting the interest rates to stop further appreciation of the local currency, head of the Turkish Exporters’ Assembly (TIM), Mehmet Buyukeski, said.

The Bank should do what is necessary, if it needs to buy FX or to lower the rates, it should, Buyukeksi said. However, the head of TIM is still confident that the government’s 2014 export target of USD 166.5bn will be met. Earlier this month, economy minister Nihat Zeybekci made similar comments, saying that interest rates should be immediately cut to a level that would boost investment, production and growth. The current levels of TRY should be maintained and the Central Bank should be ready to intervene if the currency fell below 2.10 to USD, Zeybekci said.

Exports rose 11.5% y/y to USD 13.15bn in April as sales to the EU increased 22% y/y, according to the latest data from the TIM. In the first four months of the year, Turkey's exports amounted to USD 53.4bn, representing a 9.5% y/y increase. TRY weakened against the major currencies after May 2013, even falling to around 2.4 against USD. But, the local currency has firmed against USD and EUR after the March local elections, and it has been also supported by some better-than expected macroeconomic data. TRY firmed to below 2.08 against to USD last Thursday, its strongest level since late December.