- Analytics
- News and Tools
- Market News
- USD/TRY: Lira weakness to persist even if consensus of 100bp cut realizes – Credit Suisse
USD/TRY: Lira weakness to persist even if consensus of 100bp cut realizes – Credit Suisse
Most investors seem to think the Turkish central bank’s monetary policy committee will cut its policy rate by 100bps at its meeting on Thursday, December 16. Still, economists at Credit Suisse think depreciation pressure on the lira is likely to prevail in this scenario.
The risk is weighted towards more lira weakness
“We think the lira will remain subject to depreciation pressure if the central bank cuts the policy rate by 100bps tomorrow, even though that would be in line with the consensus forecast.”
“Our logic is that for as long as real rates are far into negative territory, investors will want to see a central bank pause in its cutting cycle as a minimum condition for the lira to stabilize. From this perspective a 100bps policy rate cut, although priced in, is likely to keep USD/TRY subject to an upward pressure.
“A decision to remain on hold tomorrow would probably suffice to keep USD/TRY below its record high of 14.75-14.76 in the coming days without a need for the central bank to sell dollars.”
“In a third scenario, downward pressure on USD/TRY could emerge if the central bank guides markets towards expecting policy rate hikes. But this scenario does not seem likely.”
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
