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Little Reaction in USDTRY to Below-Consensus Rate Hike

TRY
  • USDTRY little changed on the decision though maintains losses at 0.4% on the day.
  • Reminder that TRY fell to a record low against USD following the June MPC meeting when rates were raised below the market consensus, highlighting the down-side risks to TRY of an inefficient transmission of tighter monetary policy.
  • Worth recalling the prominent Hurriyet columnist Selvi wrote that his impression from "economic circles" is that the one-week repo rate will be raised to a below-consensus 16.5-17%. While state banks may have been intervening to contain volatility here, the lack of market reaction could also be due to a more well-prepared local market today.

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