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CBRT Delivers Above-Market Hike: Shows Resolve To Stabilise CPI/TRY

TURKEY
  • As mentioned in the preview:- Turkey was seeing diminishing marginal returns to market-expected rate hikes - necessitating a shift in the narrative or new catalysts to re-invigorate the tightening drive and revive the de-dollarisation process
  • Guidance towards more potential tightening if warranted sends a strong message that the CBRT is dedicated to delivering on inflation promises, despite having increased the FY21 inflation target from 11.24% to 11.54%
  • Turkish USD bonds outperforming post-announcement with the curve shifting 6.3-12.7bp lower
  • gains mixed across the curve, but 2Y is most bid
  • USD/TRY now approaching Sup2 at 7.3224, Sup3: 7.2489
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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