USD/TRY: The artificial Lira stabilization is reaching its limits – Commerzbank

FXStreet Insights Team FXStreet

This morning we saw a particularly large jump in the TRY exchange rates. Ulrich Leuchtmann, Head of FX and Commodity Research at Commerzbank, expects Lira to take a depreciation hit.

Central bank will certainly try its best to prevent a TRY crash

“As I write these lines, USD/TRY is still trading in the 20.00 range – well below the extreme swings, but just well above the levels before today's TRY weakness bout. Even if USD/TRY has returned to normal by the time you read these lines, this episode does make it clear that the artificial Lira stabilization is reaching its limits.”

“Until the 2nd round of the presidential election, the central bank will certainly try its best to prevent a TRY crash. However, it cannot work magic. Even before the second round of voting, a scenario is possible in which the dams burst and the Lira takes a depreciation hit.”

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FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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