The Turkish Lira is seeing huge volatility today as traders react to the latest intervention from the government. On Friday, the government announced a new loan ban in Turkey which precludes lenders from issuing funding to corporates holding more than 15 million Liras and if the total sum of the loan exceeds 10% of total assets or annual turnover.
The move is the latest in a string of efforts from the government to help prop up the Lira without resorting to monetary tightening. The CBRT has engaged in campaign of rate cuts following the shock removal of the former CBRT head by Erdogan, who installed a dove which is largely being controlled by the Turkish Lira.
While TRY strengthened initially as a flood of weekend orders were processed at the open last night and in Europe this morning, the move is now reversing sharply, threatening further weakening of TRY to come.
Technical Views
USDTRY
The correction lower in USDTRY saw the market trading down to test the bullish trend line from December 2021 lows along with the 216.3999 level support. While the market briefly pierced below the trend line, we are now holding back above and, while the trend line holds as support, the focus is on a further push higher back above the 17.3538 level towards 18.2370 next.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.