Lira likely to suffer if the CBT disappoints – Commerzbank
Since the surprise interest rate hike on August 24, which gave the Lira a tidy 6% boost, the Turkish currency has been depreciating as if on a string. Economists at Commerzbank analyze TRY outlook ahead of the Turkish Central Bank (CBT) Interest Rate Decision.
CBT's restrictive monetary policy is only a necessary condition for a Lira recovery
If the CBT disappoints today, the Lira is likely to suffer. Because then all the analysts (including me!) will be speculating whether President Recep Tayyip Erdoğan had his fingers in the pie again. But if the CBT raises rates as expected or more, there is little chance of a sustained Lira recovery.
Unfair? Well, the CBT's restrictive monetary policy is – to use mathematicians' jargon – only a necessary condition for a Lira recovery. Turkey's policy mix would only be sufficient if the president's monetary turnaround were more credible to the market and to the public than it is at present.
Reprinted from FXStreet_id,the copyright all reserved by the original author.
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
FOLLOWME Trading Community Website: https://www.followme.com
Hot
No comment on record. Start new comment.