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TRY Firms as CBRT Affirms Tight Bias, But Optimism May be Misplaced

TURKEY
  • USD/TRY notches lower towards 8.15 after CBRT commits to continued tightness
  • This seems a little misplaced as it is highly unlikely that the CBRT is going to tighten further with Kavcioglu's placement being predicted on not tightening further and eventually lowering rates
  • Markets may have just taken this as a more extended hold period than previously anticipated on its commitments to keep rates above inflation
  • However, with inflation projected to inch higher towards 18-19% this should see real yield/carry differentials erode substantially, making TRY assets less attractive over time
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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