Lira Plunges To Record Lows After CBRT MPC Rejig

The Turkish lira has been battered after Pres Erdogan ousted three central bank policymakers after meeting with CBRT Gov Kavcioglu. The lira printed fresh record lows before paring some gains, remains the worst performer in EMFX space.

• The President fired two CBRT Dep Govs, Semih Tumen and Ugur Namik Kucuk, as well as MPC member Abdullah Yavas. Taha Cakmak was appointed new Dep Gov, while Yusuf Tuna was named a new MPC member.
• Sources told Bloomberg that the MPC reshuffle followed a meeting during which Erdogan and Kavcioglu discussed changes to the Committee.
• Kucuk was the only dissenter at the CBRT's monetary policy meeting last month and voted against cutting interest rates. Yavas was absent after contracting Covid-19.
• USD/TRY topped out at TRY9.1883 before trimming gains. The rate last sits at TRY9.1372, ~490 pips better off. Bulls look to a rally above the upper 3.0% 10-DMA envelope at TRY9.2275. Conversely, bears need a pullback under Oct 4 low of TRY8.8330 to get some reprieve.
• EUR/TRY peaked at TRY10.6658 and last changes hands at TRY10.6097, ~700 pips higher on the day. Bulls see the upper 3.0% 10-DMA envelope at TRY10.6885 as their initial target, while bears look for a dip through Oct 8 low of TRY10.2516.