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USD/TRY Edges +2.22% Higher W/W as Energy Prices Exert Inflationary Pressures

  • USD/TRY trades +0.46% higher this morning, broadly in line with early upside in the BBDXY.
  • The cross rose +0.62% yesterday and is up +2.24% w/w, having held onto gains above the 14.00 handle yesterday.
  • Spiralling energy and commodity prices continue to exert pressure on Turkey as headline CPI surges to 54.44% in Feb, with analysts forecasting a rise to 60-65% in the coming months – intensifying pressures on the economy.
  • Administrative changes to VAT and customs duties are having little effect thus far and pressure is building on the Erdogan administration to tackle the issues or face increased social-discontent.
  • Support for the opposition has been growing in recent months and the AKP is likely to face a difficult run at the polls in June, provided the election runs fairly.
  • With he Ukraine crisis set to continue until Kyiv is surrounded, followed by a potential siege – TRY remains notably vulnerable to further depreciation and use of reserves by the CBRT/state banks.
  • Intraday Sup1: 14.1056, Sup2: 14.025, Res1: 14.232, Res2: 14.3109
MNI London Bureau | +44 020-3983-7894 |
MNI London Bureau | +44 020-3983-7894 |

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