The Turkish Lira is extending its upside momentum vs. the greenback on Monday, with USD/TRY slightly down for the day near 3.6250.
USD/TRY in 6-week lows
TRY has gathered extra steam following the recent decision by the central bank to allow export companies to repay loans in the domestic currency. The companies could now use the central bank’s FX purchase rate set in early January to repay export loans maturing by May 31, alleviating the need to convert Liras into foreign currencies.
This measure follows the central bank’s further tightening of the Overnight Lending Rate to 9.25% from 8.50% seen at the late January meeting, aimed to somehow counteract the fast depreciation of the Lira.
Spot is thus retreating for the fourth consecutive week so far, coming down from all-time peaks just below 3.9500 seen early in January.
USD/TRY key levels
At the moment the pair is down 0.04% at 3.6253 and a breakdown of 3.5539 (low Jan.5) would expose 3.4500 (low Dec.13 2016) and then 3.3370 (low Dec.8 2016). On the other hand, the next resistance is located at 3.6460 (55-day sma) followed by 3.7262 (20-day sma) and finally 3.7607 (high Feb.8).
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