Another day, another all-time high in USD/TRY, this time approaching the 10.2500 level on Tuesday.
The depreciation of the Turkish currency knows no limits so far and lifts USD/TRY to new all-time tops near 10.25 on Tuesday, extending at the same time the positive streak for the sixth session.
The fragile sentiment around the lira keeps weighing on spot, which is also underpinned by the solid performance of the greenback across the board.
On the domestic front, Treasury and Finance Minister L.Elvan said earlier on Tuesday that the country was not “at the level we desire” when it comes to inflation. It is worth recalling that consumer prices rose 19.89% in October vs. the same month of 2020 and that the Turkish central bank (CBRT) raised the year-end inflation to 18.4% (from 14.1%).
The CBRT meets on Thursday and it could once again reduce the One-Week Repo Rate according to markets’ consensus, as it did in the last two monetary policy meetings.
In the Turkish cash markers, yields of the 10y bond gyrate around 18.60% on Tuesday, extending the corrective from recent tops.
So far, the pair is gaining 1.80% at 10.2381 and a drop below 9.8395 (high Oct.25) would expose 9.6755 (20-day SMA) and finally 9.4722 (monthly low Nov.2). On the other hand, the next up barrier lines up at 10.2505 (all-time high Nov.16) followed by 11.0000 (round level).
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