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22 Apr 2015
No more rate cuts in Turkey – TDS
FXStreet (Edinburgh) - Strategist Paul Fage at TD Securities, believes the easing cycle in Turkey could be over.
Key Quotes
“At today’s MPC meeting the CBRT (Central Bank of Turkey) kept all rates on hold, in line with our and the unanimous consensus expectation”.
“The CBRT, as it had already said it would, cut the FX depo lending rates and raised the rate paid on TRY Required Reserve (RRs). Prior to the meeting the CBRT had suggested that other, unspecified measures might be taken today, but there were none announced”.
“We do not think that the measures announced today will provide much support to TRY. Indeed, USDTRY has since risen by about 1%”.
“With the market increasingly focussing on the political risks in Turkey in the run-up to the June elections, and with the CBRT unlikely to hike rates, we expect to see USDTRY move even higher”.
“In light of the current weakness of TRY and the higher than expected March CPI inflation rate of 7.61% Y/Y, we are no longer expecting any cuts in the CBRT repo rate, and we think that the next move in rates will be up”.
Key Quotes
“At today’s MPC meeting the CBRT (Central Bank of Turkey) kept all rates on hold, in line with our and the unanimous consensus expectation”.
“The CBRT, as it had already said it would, cut the FX depo lending rates and raised the rate paid on TRY Required Reserve (RRs). Prior to the meeting the CBRT had suggested that other, unspecified measures might be taken today, but there were none announced”.
“We do not think that the measures announced today will provide much support to TRY. Indeed, USDTRY has since risen by about 1%”.
“With the market increasingly focussing on the political risks in Turkey in the run-up to the June elections, and with the CBRT unlikely to hike rates, we expect to see USDTRY move even higher”.
“In light of the current weakness of TRY and the higher than expected March CPI inflation rate of 7.61% Y/Y, we are no longer expecting any cuts in the CBRT repo rate, and we think that the next move in rates will be up”.