Smaller than 500 bps hike might initially hit the Lira – ING – Crypto News – Crypto News
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USD/TRY remains bid above 18.00, keeps targeting 2022 highs USD/TRY remains bid above 18.00, keeps targeting 2022 highs

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Smaller than 500 bps hike might initially hit the Lira – ING – Crypto News

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Today, the Central Bank of Türkiye (CBT) announces its policy decision. Economists at ING analyze Lira’s outlook ahead of the announcement.

CBT currently has the TRY locked in a managed depreciation regime

The vast majority of economists, ourselves included, expect a 500 bps hike. There is a minority, however, looking for a smaller 250 bps hike. A smaller hike might initially hit the Turkish Lira on the view that the CBT is reluctant to take real rates into positive territory.

However, we suspect there will be demand for Lira through the forwards market were the year-end outright to be priced substantially above 30.00. We say this because it looks like the CBT currently has the TRY locked in a managed depreciation regime, with a seeming target of around 30.00 at year-end.

 

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