- USD / TRY’s bullish march looks out of control.
- The lira is depreciating at record levels against the US dollar.
- Turkey’s central bank could cut rates further on Thursday.
Another day, another all-time high in USD/TRY,this time approaching the 10.2500 level on Tuesday.
USD / TRY at record levels, looking at CBRT
The depreciation of the Turkish currency knows no limits so far and the USD / TRY climbs towards 10.25, a new all-time high, extending the positive streak for a sixth day. The fragile sentiment around the lira continues to weigh on the price of the exchange rate, which is also affected by a general rise in the dollar.
On the domestic front, Treasury and Finance Minister L. Elvan said Tuesday that the country was not “at the level we want” when it comes to inflation. It should be remembered that consumer prices rose 19.89% in October compared to the same month of 2020 and that the Central Bank of the Republic of Turkey (CBRT) raised the year-end inflation forecast to 18.4% (from 14.1%).
The CBRT meets on Thursday and could lower the repo rate to one week (the benchmark) again according to the consensus of the markets, as it did in the last two monetary policy meetings. This also puts downward pressure on the local currency.
USD / TRY Key levels
So far the pair is gaining 1.80% at 10.2381 and a drop below 9.8395 (Oct 25 high) would expose 9.6755 (20 day moving average) and finally 9.4722 (Nov 2 low). On the other hand, the next barrier above is lined up at 10.2505 (all-time high) followed by 11.0000 (psychological level).
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