TRY: USD/TRY Trades at Record High Amid Muted Corporate Demand for Lira

USD/TRY is up 0.65% on the session and at a fresh record high, with Bloomberg attributing the lira’s slide to muted corporate demand for the hard currency. Today’s move higher comes despite prevailing dollar weakness following the US CPI data yesterday. 

• While PPI figures came in stronger than expected today, it has done little to affect market pricing for Fed rate cuts and therefore the initial blip higher in the greenback on release of the data swiftly reversed.
• Comments from CBRT Governor Karahan, who said the central bank must remain cautious, provided only brief relief for the local currency, which looks set to end the week with losses of around 1.2% versus the greenback.
• More broadly, the more volatile intraday movements for USD/TRY (opposed to a near-straight line) highlights policymakers’ attempts to reduce soft capital controls and restrictions on FX transactions.