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Erdogan not even TRYing to address crisis as lira takes another plunge

Fawad Razaqzada Fawad Razaqzada 17/11/2021
Erdogan not even TRYing to address crisis as lira takes another plunge Erdogan not even TRYing to address crisis as lira takes another plunge
Erdogan not even TRYing to address crisis as lira takes another plunge Fawad Razaqzada
The Turkish lira continues to hit new record lows. Moments ago, we saw the following headlines flash on our screens:
 
TURKISH LIRA EXTENDS DECLINES TO 3%, SETTING FRESH RECORD LOW
TURKISH LIRA WEAKENS TO NEW RECORD LOW BEYOND 12 AGAINST EURO
 
Year-to-date, the Turkish lira is down over 40% against the dollar and more than 30% against the euro, making it one of, if not the, weakest currencies globally.
 
Its latest drop is in response to momentum selling after the USD/TRY broke the 1.10 handle on Monday, and after more defiant remarks from Turkey’s President earlier in the day, when these headlines came in:
 

ERDOGAN: WILL FIGHT AGAINST INTEREST RATES AS LONG AS I AM HERE TURKISH

TURKEY'S ERDOGAN SAYS INTEREST RATES ARE THE REASON, INFLATION IS THE RESULT TURKEY'S ERDOGAN SAYS WILL NOT ALLOW PEOPLE TO BE CRUSHED BY INTEREST RATES

 
The losses for the Turkish lira had already deepened sharply on Tuesday and we are seeing a continuation of that slide today. Another rate cut from the CBRT on Thursday is imminent, despite surging inflation in the country where CPI is currently above 20%. The currency crisis is likely to get worse if the Turkish Central Bank, under the heavy influence of Erdogan, goes ahead with a rate cut. Economists are obviously calling for rate hikes, but that’s not going to happen. Instead, expectations are centred around a 100 basis point cut to 15% from 16% currently in benchmark interest rate.
 
Watch out for contagion risks, particularly for currencies of oil-importing nations such as India where the Rupee has already been weakening.

USDTRYSource: ThinkMarkets and TradingView.com
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
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