- USD/TRY marks a new all-time high around 23.5000 on Friday.
- President Erdogan appoints a new president for the central bank.
- Domestic lenders supported the Lira on Thursday.
The massive sale of the Turkish currency does not stop, and the USD/TRY it advances to a new all-time high just above 23.5000 by the end of the week.
USD/TRY rises despite new CBTR chief
USD/TRY quickly pulled back from Thursday’s pullback and resumed its bullish run to uncharted territory around the 23.5000 area by the end of the week, only to give back some of those gains afterwards.
The pair’s rise came despite President RT Erdogan appointing Hafize Gaye Erkan as the new Governor of the Central Bank of Turkey (CBTR).
Erkan, a former bank executive in the US, has become the first woman to lead the CBTR. She had previously worked at Goldman Sachs and First Republic Bank. Markets may interpret her appointment as a sign of Ankara’s intention to normalize its monetary policy, which has experienced years of extremely low interest rates and runaway inflation.
It remains to be seen, however, whether Erkan can impose his monetary will under Erdogan’s leadership. The first round of this meeting is scheduled for June 22, when the CBTR holds its monetary policy meeting.
So far, the Turkish currency has already depreciated by more than 25% since the beginning of the new year, while the fall has reached more than 170% since the Turkish central bank (CBTR) began its easing cycle in August 2021. .
Other news mentions that the new Turkish Finance Minister M. Simsek and senior bank executives are scheduled to meet for the first time next week.
On the calendar, Turkey’s Industrial production contracted 0.9% month-on-month in April and 1.2% year-on-year.
What to keep in mind around the TRY
USD/TRY maintains its bullish bias well entrenched, always underpinned by the relentless plunge in the Turkish currency.
Meanwhile, investors are expected to closely monitor upcoming decisions on monetary policy, especially after President RT Erdogan appointed former Economy Minister M. Simsek as new Finance Minister following the cabinet reshuffle in the wake of the second return of the general elections on May 28.
Simsek’s appointment has been greeted with optimism by market insiders, though it remains unclear whether his orthodox stance on monetary policy can survive amid Erdogan’s penchant for fighting inflation through lower interest rates.
In a more macro scenario, it is assumed that the price action around the Turkish lira will continue to revolve around the evolution of energy and raw material prices, which are directly correlated with the evolution of the war in Ukraine. , broad risk appetite trends and dollar dynamics.
technical levels
For now, the pair is gaining 1.19% at 23.3466 and faces the next hurdle at 23.5196 (June 9 all-time high) followed by 24.00 (round level). To the downside, a break below 19.8086 (55-day SMA) would expose 19.3827 (100-day SMA) and finally 18.9661 (200-day SMA).
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
