- The Turkish currency depreciates to record lows vs. the greenback.
- The CBR hiked rates by 500 bps at its event on Thursday.
- The bank keeps the inflation target at 5.00%.
Further selling pressure hurts the Turkish lira and lifts USD/TRY to a new all-time high around 28.1500 on Thursday.
USD/TRY accelerates the move higher despite the CBRT hike
USD/TRY extends its advance and looks to consolidate the recent breakout of the 28.00 hurdle despite the fact that the Turkish central bank (CBRT) raised the One-Week Repo Rate by 500 bps to 35.00% (from 30.00%), matching the broad consensus.
That said, the central bank raised its key policy rate by 500 bps for the second consecutive meeting, while the lira has already depreciated more than 28% vs. the US dollar since January.
The central bank justified its decision to extend the tightening cycle in light of still-highly elevated inflation and potential upside risks stemming from higher crude oil prices and geopolitical concerns.
In addition, the CBRT maintains its inflation target at 5.00% in the medium term and stands ready to further tighten its monetary conditions accordingly.
USD/TRY key levels
So far, the pair is gaining 0.35% to 28.1440 and faces the next up-barrier at 28.1551 (all-time high October 26) ahead of 29.0000 (round level). On the downside, a break below 27.2064 (55-day SMA) would expose 26.5841 (100-day SMA) and finally 25.2143 (monthly low August 24).
(This story was corrected on October 26 at 12:13 GMT to say that USD/TRY climbs to fresh all-time highs.)
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.