USD/TRY remains stuck in a narrow range at around 18.60. Economists at TD Securities expect the pair to jump toward to 27 by the first quarter of 2023.
CBRT ends easing with a final cut
“The CBRT cut the policy repo by 150 bps to 9.00%, in line with our forecasts and the consensus. With rates achieving 'single-digit' levels, the CBRT has called the end of easing.”
“Today's decision cuts ex-ante real rates further to -76.5%. While inflation is likely to be at or close to the peak, monetary policy in Turkey will remain excessively expansionary for the foreseeable future.This suggests persistent inflationary and negative currency pressures.”
“We still expect USD/TRY to blow up to around 27 (from 18.63) in Q1 2023. We also expect rates to be hiked in emergency mode next year, with a likely peak of around 40%.”
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