- TRY bears back in control, as relief offered by CBRT waned.
- USD/TRY makes another run at 5.0 level amid Turkish political saga.
USD/TRY stalled its corrective slide and rebounded nearly three percent so far this Thursday, as the Turkish Lira lost ground again amid unstable political environment in Turkey and a lack of confidence in Turkey’s President Recep Erdogan.
USD/TRY looks to 4.9237, decade highs
The Lira reversed almost half the recovery seen yesterday versus its American counterpart and remains on track to book its worst month in a decade. The Lira free-fall on Wednesday stalled after the Central Bank of the Republic of Turkey, CBRT, came to its rescue and unexpectedly hiked its key lending rate to to 16.5% from 13.5% to stem the currency decline.
Looking ahead, the Turkish currency remains exposed to further downside risks, in the wake of a combination of the strengthening dollar, a widening current-account deficit and President Tayyip Erdogan’s intensions to take more responsibility for monetary policy if he wins the June 24 election.
USD/TRY levels to watch
Higher side: 4.80 (round number), 4.9237 (decade highs), 5.0688 (classic R2).
Lower side: 4.6095 (5-DMA), 4.5420 (May 23 low), 4.5048 (10-DMA).
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