Turkey Policy Rate – Inflation and USDTRY
USDTRY is feeling the heat of another uptrend. Whenever the Central Bank of the Republic of Turkey (CBRT) changed its policy to negative rates, USDTRY goes boom. After the former CBRT president Naci Agbal’s dismissal because of the rate hikes, USDTRY stabilization ended. With the rate drops, USDTRY reached over 18 in late 2021. But with the government’s unconventional tools like government guarantees on FX losses to lira deposits and FX selling using the limited reserves which come from swap deals or from mandatory FX selling to CBRT to exporters, the government and the bank, are able to hold the USDTRY below 15 for a few months.
Now, inflation reached to %70, and the policy rate is way below the inflation. The pressure was building for some time. With the passing of 15, USDTRY starts to move upward again.
USDTRY Daily Chart
The price is testing the middle point of the uptrend which started at the start of this year. 15.50-15.66 is a major resistance zone. If passed, USDTRY may continue its upward move to above 16 in the short to medium-term. For downside moves, 15 might become the major support with some small supports at 15.13-15.33.
