Lira falls further after CBRT cut rates by 0.5%
The Turkish lira extended weakness and hit the lowest in nine months on Wednesday after Turkey’s central bank cut interest rates by 50 basis points.
The CBRT lowered key interest rate from 11.25% to 10.25% in widely expected action as most of market observers pointed to 0.5% cut.
The central bank opted for more measured cut as inflation is broadly in line with projections, with annual CPI rate at 12.15% (down from 25% last year), though still well above central bank’s target at 5%.
Analysts expect that CBRT’s easing cycle soon comes to its end on concerns about weakening lira and widening current account deficit.
The USDTRY bulls hold for the sixth straight week and cracked 6.08 barrier after cb’s action, with psychological 6.10 resistance and Fibo barrier at 6.1198 (76.4% of 7.1074/5.1323) coming in focus.
Res: 6.0865; 6.1000; 6.1198; 6.1301
Sup: 6.0717; 6.0675; 6.0516; 6.0428