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USD/TRY Drifts Lower Amid Ukraine Talks Progress, But Not Out of the Woods

  • USD/TRY trades +0.19% higher this morning, having failed to hold below the 14.50 handle in yesterday’s session after a sharp push to an intraday low of 14.6133.
  • The easing in oil prices has benefitted TRY this week with its depreciation momentum stalling around the 15.00 handle.
  • While Ukraine negotiations are seeing progress, the situation is far from over with risks to inflation increasing with the length of the conflict.
  • Today, the focus shifts to the FOMC meeting where the Fed will deliver its first +25bp hike, with markets expecting a dot plot median of at least 5 hikes in 2022 -with hawkish risks to the upside.
  • Beyond this, the CBRT meeting tomorrow has been well-telegraphed and is not expected to be a major market mover.
  • Although, the statement may add some hawkish terminology RE global energy prices – this will not shift the CBRT’s stance out of ‘wait & see mode.’
  • Interestingly, the first FX-linked deposit maturity is due on 21 March, with Govt paying a $850m burden on the rates differential above the deposit rate – reflecting the embedded fiscal risks of a sharp lira depreciation in the future.
  • Intraday Sup1: 14.6462, Sup2: 14.5619, Res1: 14.7634, Res2: 14.8366
MNI London Bureau | +44 020-3983-7894 |
MNI London Bureau | +44 020-3983-7894 |

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