USD/TRY: Next big move is getting closer as Turkey’s real interest rate stays deeply negative – Commerzbank
|Today, Turkey’s central bank (CBT) will hold its routine monthly meeting. Despite the high inflation level, economists at Commerzbank expect the CBT to stand pat. Subsequently, they believe that the next big move in USD/TRY is around the corner.
CBT’s announcement to turn out to be a non-event
“CBT’s announcement is, once again, likely to turn out to be a non-event as it has been over the past couple of quarters: CBT is widely expected to keep its benchmark rate unchanged at 14% even as inflation touches 70% and inflation expectations touch 60%, simply because CBT is not really free to hike rates.”
“In fact, had it not been for constant depreciation pressure on the lira exchange rate, CBT probably might have even cut the rate.”
“We stick with our view that as Turkey’s real interest rate stays deeply negative, the next big move in USD/TRY is getting closer.”
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