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Rabobank analysts note that the Turkish lira depreciated 1.4% on Monday and dragged its CEEMEA peers lower versus the dollar after Turkey’s central bank announced measures to encourage lenders to provide more credit to the struggling economy.

Key Quotes

“The negative market response to the credit incentives can be attributed to concerns that the administration intends to rely on the same tools as on previous occasions to generate stronger economic momentum over the short-term horizon.”

“USD/TRY has potential to extend its rebound from the recent low.”