USD/TRY tumbles to fresh lows near 7.50 post-CBRT
|- USD/TRY accelerates the downside to the 7.50 region.
- The CBRT hiked the One-Week Repo Rate to 15%.
- The lira climbs to 2-month tops vs. the US dollar.
The buying pressure around the Turkish lira accelerates on Thursday and drags USD/TRY to new 2-month lows in the 7.50 area.
USD/TRY weaker on CBRT decision
USD/TRY resumes the downside and breaks below a multi-session consolidative range after the Turkish central bank (CBRT) hiked the key One-Week Repo Rate by 475 bps to 15%, matching the broad consensus. According to the CBRT, the One-Week Repo Rate will now by the main policy tool, something that foreign investors were also requiring and that reinforces the return to a more orthodox monetary stance.
The CBRT also hiked the Overnight Borrowing Rate and the Overnight Lending Rate to 13.50% an 16.50%, respectively.
The central bank is expected to maintain tight monetary conditions until it sees a persistent drop in inflation, while it expects to reverse the continuous dollarization of the economy.
The move, despite largely anticipated (and long waited) by market participants, kind of confirms the new approach by the Erdogan’s administration and fuels further hopes of bigger changes in the country, particularly regarding structural reforms and a more market-friendly orientation.
USD/TRY key levels
At the moment the pair is down 1.57% at 7.5918 and a drop below 7.5059 (monthly low Nov.19) would expose 7.4988 (100-day SMA) and then 72019 (low Aug21). On the upside, the next hurdle is located at 7.7959 (weekly high Nov.17) followed by 7.8329 (55-day SMA) and finally 8.5777 (all-time high Nov.6).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.