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The CBRT will announce interest rates on Thursday, 21 May. It will be a controversial decision regardless of the final outcome, per TD Securities. USD/TRY is trading at 6.8734. 

Key quotes

“We expect the CBRT to cut the repo rate by 100bps to 7.25%. More importantly, we will be following closely the dynamic of the CBRT’s swap book.” 

“We think the lira will perform based on swap activity rather than CBRT’s rate decision. We expect a minor negative reaction for TRY if the CBRT cuts 100bps as we expect, but may recover shortly after.” 

“With three large swap redemptions this week, before and after the CBRT meeting, we will see how TRY reacts to them. A neutral reaction on 18 and 20 May will likely leave USD/TRY also relatively neutral to a CBRT cut.”