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20 Aug 2015
Turkish lira remains under downside pressure – BTMU
FXStreet (Edinburgh) - Currency Analyst at BTMU Lee Hardman reviewed the recent developments around the Turkish currency.
Key Quotes
“The more dovish than expected FOMC minutes have offered little to no relief for most emerging market currencies”.
“The Turkish lira’s decline has even accelerated further overnight lifting USD/TRY briefly above our year-end target at the 3.0000-level”.
“The lira’s increasingly sharp decline over the last month is now almost similar in scale to the sell-off recorded between December 2013 and January 2014. On that occasion it prompted the CBoT to hike their key policy rate sharply by 5.50 percentage points to 10.00% which helped to stabilize the lira until this year”.
“The recent sharp weakening of the lira is increasing pressure on the CBoT to tighten monetary policy as upside risks to their inflation forecast are increasing”.
“Not even the ongoing decline in the price of crude alongside the weaker lira both of which will help narrow Turkey’s current account deficit are offering much support in the near-term”.
Key Quotes
“The more dovish than expected FOMC minutes have offered little to no relief for most emerging market currencies”.
“The Turkish lira’s decline has even accelerated further overnight lifting USD/TRY briefly above our year-end target at the 3.0000-level”.
“The lira’s increasingly sharp decline over the last month is now almost similar in scale to the sell-off recorded between December 2013 and January 2014. On that occasion it prompted the CBoT to hike their key policy rate sharply by 5.50 percentage points to 10.00% which helped to stabilize the lira until this year”.
“The recent sharp weakening of the lira is increasing pressure on the CBoT to tighten monetary policy as upside risks to their inflation forecast are increasing”.
“Not even the ongoing decline in the price of crude alongside the weaker lira both of which will help narrow Turkey’s current account deficit are offering much support in the near-term”.