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The underlying USD/TRY bullish trend remains intact due to prevailing market concerns about Turkey’s vulnerabilities exacerbated by the coronavirus crisis and a weaker lira, per Rabobank. 

Key quotes

“The prospect of the worst tourist season in many decades accompanied by a sharp fall in good exports and the plunge in FX reserves pose a major challenge for Turkey, which needs substantial inflows of hard currencies to finance its imports and short-term FX debt obligations.” 

“We will be first in line to adopt a constructive view on the Turkish lira as soon as the inefficient and counterproductive strategy of defending the currency at all costs by spending a substantial amount of USDs on FX interventions and discouraging market participants from trading the lira is abandoned.” 

“At this stage, the pullback in USD/TRY from the 7.2690 high is just a short-term correction within the bullish trend that remains intact.”