- USD/TRY extends the rise to the 13.70 zone.
- News cited a positive meeting between finmin Nebati and investors.
- Turkey’s 10-year bond yields hover around 21.50%.
The Turkish lira depreciates even more and pushes the USD/TRY to fresh multi-session highs near 13.70 on Tuesday.
USD/TRY remains consolidated in the same place
USD/TRY challenges the upper end of the range that has prevailed since mid-January around 13.70 amid a firmer tone in the USD and the persistent decline in Turkey’s 10-year bond yields.
In the latter, yields are navigating the monthly low zone around 21.50% after climbing to the 22.40% zone at the beginning of February.
The lira, meanwhile, appears to have exacerbated the slide after inflation figures rose to 48.69% in the year to January, the highest level in 20 years.
On another front, Turkey’s current account deficit is estimated at around $15 billion in 2021 according to a Reuters poll released on Monday. The result, however, is less than the 21,000 million dollars estimated by the government.
Meanwhile, the meeting between finmin N.Nebati and investors in London seems to have given a positive result. At the meeting, unorthodox Turkish economic policy and a planned bond sale took center stage amid recent data suggesting Turkey’s foreign exchange reserves rose by $5-6 billion over the past week. Nebati also suggested that the rise in inflation in the country is due to reasons that foreigners cannot understand culturally.
What to look for around TRY
The pair remains consolidated in multiple sessions, always within the range of 13:00 to 14:00. While skepticism remains high about the effectiveness of the ongoing scheme to promote de-dollarization of the economy, thereby supporting inflows into the lira, the CBRT’s reluctance to change course (collision?) and the pervasive political pressure to favor Lower interest rates in the current context of runaway inflation and (very) negative real interest rates are a sure recipe to keep the national currency under pressure for the time being.
Technical levels
So far the pair is up 0.44% at 13.6296 and a drop below 13.3226 (55-day SMA) would expose 13.2327 (monthly low Feb 1) and finally 12.7523 (low Jan 3, 2022). On the other hand, the next upside barrier lines up at 13.9319 (Jan 10, 2022 high), followed by 18.2582 (Jan 20 all-time high) and then 19.0000 (round level).
Source: Fx Street
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
