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USD/TRY Hovers Below 15.00 as CBRT Meeting Approaches

TURKEY
  • USD/TRY trades +0.34% higher this morning, mirroring early price action in the BBDXY. TRY came under pressure last week as the impact of the Ukraine crisis continued to drive the currency weaker for a -3.98% loss vs the greenback.
  • Price action pulled back sharply from the 15.00 handle, but markets continue to favour fading bouts of TRY strength given the CBRT’s unwillingness to hike, despite major inflation risks.
  • The CBRT meeting this week is expected to be mostly similar to the prior meeting with rates being left on hold at 14.00%.
  • Meanwhile, Erdogan continues to look to improve regional relations with middle eastern peers and Europe with Borrell highlighting Turkey’s importance within NATO over the weekend.
  • This week’s Fed meeting is also expected to signal the first +25bp hike in its hiking cycle – adding difficulties for Turkey, given its high external debt load.
  • Focus in USD/TRY is on 15.00 for now and how vigorously the CBRT/state banks decide to defend the level.
  • Intraday Sup1: 13.7634, Sup2: 13.6462, Res1: 13.9265, Res2: 14.9925
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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