- USD / TRY adds to Wednesday’s losses around 7.85.
- The CBRT Minutes confirms the recent orthodox turn in monpol.
- Turkey Economic Sentiment and CBRT FSR expire on Friday.
The Turkish lira advances further and forces the USD/TRY to fall to 2-day lows in the 7.85 region on Thursday.
USD / TRY upside appears limited above 8.0000 … for now
USD / TRY is down for the second session in a row, extending the rejection from the weekly highs near 8.05 recorded earlier in the week (Nov 24).
In its Minutes from the last monetary policy meeting, the CBRT highlighted the return to orthodoxy in monetary policy and confirmed the new pro-market approach. On this, it is worth remembering that the central bank will only use the One Week Repo Rate as the main policy tool from now on.
Additional buying interest around the lira comes Thursday after news cited that the new economic team plans to lift restrictions on the currency, particularly those on foreign banks, and could include easing of the currency. currency swap limits. The measure mainly aims to rebuild the depleted stock of the country’s foreign exchange reserves and increase transparency in the markets.
So far this year, Turkey’s foreign exchange reserves have fallen by more than $ 82 billion (or 22%) and by half when it comes to net reserves. However, net reserves fell into negative territory if money borrowed from local banks through swaps is excluded.
Key levels
Right now the pair is shedding 0.65% at 7.8568 and a dip below 7.5469 (100-day SMA) would expose 7.5119 (monthly low on Nov 20) and then 7.3970 (horizontal support line from the top of August ). In the other direction, the next obstacle arises at 8.0423 (weekly maximum of November 24) followed by 8.5777 (historical maximum of November 6) and finally 9.0000 (psychological obstacle).
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