- TRY is being offered on concerns over central bank’s independence.
- President Erdogan sacked central bank’s governor on Saturday.
Turkey’s Lira fell in Asia as President Recep Tayyip Erdogan’s decision to sack country’s central bank governor fueled concerns over credibility of regulator.
USD/TRY is currently trading at 5.7580, representing 2.3% gains on the day, having hit a session high of 5.7833 earlier today.
Erdogan dismissed the central bank governor for refusing to cut interest rates, according to Hurriyet newspaper. The central bank has kept its interest rate at 24% since last September to support the weaker Lira.
The new governor Murat Usyal said on Saturday that he would independently take decisions to maintain price stability.
Markets, however, are worried that the central bank will now cut rates as desired by Erdogan. This is evident from Lira’s slide in Asia.
Also, the Dollar side of the story is looking strong as Friday’s upbeat non-farm payrolls data has dampened expectations of Federal Reserve rate cut.
Technical Levels
Resistance: 5.8568 (trendline resistance), 5.8933 (50-day MA)
Support: 5.6228 (session low), 5.5812 (200-day MA).
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