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TRY Rally Underpinned by State Bank FX Sales In Thin Markets

TURKEY
  • USD/TRY trades +0.19% higher this morning as the pair continues to trade on its own.
  • Sources revealed yesterday that recent TRY strength has been supported via backdoor USD sales at state banks – bolstering the appearance of success of Erdogan’s FX-linked deposit scheme since its announcement late on Monday.
  • This pushes the CBRT’s FX reserve position (net of swaps etc) into a more precarious state and closed to negative -45-$50bn. While this may have provided some short-term stability to TRY, hyperinflation and fiscal risks remain the key focal point going into 2022 with CPI set to head towards 30-40% in 1H22.
  • Price action remained volatile yesterday with the cross trading in 17% range and stalling just short of the 100dma at 10.00.
  • This level may be sticky in the near-term, unless the CBRT continues to burn reserves to further consolidate the move.
  • Intraday Sup1: 11.099, Sup2: 10.2512, Res1: 12.6235, Res2: 13.1971
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
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MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
BulletEM BulletEmerging Market NewsHomepage

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