Turkish lira sank to new lows against the US dollar on Thursday
Turkish lira sinks to fresh low after report state lenders stop defending the currency
The Turkish lira sank to new lows against the U.S. dollar on Thursday, as concerns mounted over challenges facing the country’s new finance minister, and after a report that state lenders have stopped selling dollars to defend the currency.
The dollar USDTRY, 0.55% climbed to 23.360 against the lira, a drop of 6.3%. That’s as investors continued to put money into Turkish stocks, in a bid to escape high inflation,
that state lenders were no longer trying to prop up the lira with dollar sales, which could be a sign of the new incoming finance minister’s promise of a more “rational economic policy,” and a more freely floating currency. the country’s state banks don’t comment on market interventions.
Reuters, meanwhile, cited four traders who said forex and gold reserves declines had halted from last week, as the government has used billions of dollars to keep the lira afloat.
The central bank has cut its policy rates from roughly 20% in 2021 to 8.5% currently, while inflation hovered at just under 40% in May, but was above 85% in October.
“Mr. Simsek is well-known and well-appreciated by the markets, and is now supposed to clean up the mess of the past year-and-a-half, and eventually restore investor confidence. But restoring confidence won’t be a piece of cake, of course,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, told clients in a note.
“In past years, Turkey didn’t lack talented finance ministers or smart central bankers. But each time sometime tried to do his/her job correctly – which in Turkey means raising the rates – he/she got rapidly sacked. Therefore, what investors want to see in Turkey is not how talented Mehmet Simsek is in finance, but how resistant he will be to the low-rate pressure from the presidential office,” she said.
” Şimşek will need to fight the beneficiaries (and possibly the President himself) in, for instance, raising interest rates. By no means is it clear that Şimşek would win his battles that lie ahead,” he added.
TECHNICALLY:
if EURUSD closes the price above the trend line (23.180) then we will see more bullish till reaching (28.450) for the next months
but closing under the trend line and stabilizing under it, then will drop to do a retest till (20.000)
The Turkish lira sank to new lows against the U.S. dollar on Thursday, as concerns mounted over challenges facing the country’s new finance minister, and after a report that state lenders have stopped selling dollars to defend the currency.
The dollar USDTRY, 0.55% climbed to 23.360 against the lira, a drop of 6.3%. That’s as investors continued to put money into Turkish stocks, in a bid to escape high inflation,
that state lenders were no longer trying to prop up the lira with dollar sales, which could be a sign of the new incoming finance minister’s promise of a more “rational economic policy,” and a more freely floating currency. the country’s state banks don’t comment on market interventions.
Reuters, meanwhile, cited four traders who said forex and gold reserves declines had halted from last week, as the government has used billions of dollars to keep the lira afloat.
The central bank has cut its policy rates from roughly 20% in 2021 to 8.5% currently, while inflation hovered at just under 40% in May, but was above 85% in October.
“Mr. Simsek is well-known and well-appreciated by the markets, and is now supposed to clean up the mess of the past year-and-a-half, and eventually restore investor confidence. But restoring confidence won’t be a piece of cake, of course,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, told clients in a note.
“In past years, Turkey didn’t lack talented finance ministers or smart central bankers. But each time sometime tried to do his/her job correctly – which in Turkey means raising the rates – he/she got rapidly sacked. Therefore, what investors want to see in Turkey is not how talented Mehmet Simsek is in finance, but how resistant he will be to the low-rate pressure from the presidential office,” she said.
” Şimşek will need to fight the beneficiaries (and possibly the President himself) in, for instance, raising interest rates. By no means is it clear that Şimşek would win his battles that lie ahead,” he added.
TECHNICALLY:
if EURUSD closes the price above the trend line (23.180) then we will see more bullish till reaching (28.450) for the next months
but closing under the trend line and stabilizing under it, then will drop to do a retest till (20.000)
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~6 analyses per day. With a clear entry point
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SM World and Economy News 24/7
Urgent News ⚡️:
t.me/SM_News_24h
