TRY rate decision - 1200 BST

[Ludwik Chodzko-Zajko IG]

Morning all,

Crunch time in Ankara at 1200 BST today. Reuters polls are suggesting an increase of 425 basis points to 22%.  Turkish banks, among them Garanti & IS bank, seem to be calling this much higher with predictions of 500bp / 22.75%.

Most US & EU banks are hiding their cards. Privately a few of our liquidity providers are suggesting 500bp over the next two Central Bank meetings and a 300bp rise today; of course these are 3rd party predictions so usual caveats apply.

We intend to widen guaranteed stop distances in the run up to this (and other pairs for MPC/ ECB), either way expect some volatility across all TRY pairs.  

 

[Guest PandaFace]

**** Christ banging out a 5% IR rise in a single decision. How on earth does this work for the wider economy... just imagine an actually useful currency (lol) having that sort of movement. The market shits with an unexpected 25bip movement.

whos got a helmet? Only play I see here is getting in after the initial spike and wait for liquidity to come back before doing the reverse trend for a few moments and then getting out fast! 

[Guest phil]

Thanks for this

[Ludwik Chodzko-Zajko IG]

Erdogan on the wires saying interest rates cause inflation & that they are a tool of exploitation.

No pressure on the CB then....

[Ludwik Chodzko-Zajko IG]

ERDOGAN SAYS TURKEY SHOULD LOWER RATES

[Caseynotes]

TRY falls 3% on 'lower rates' comment.

He already knows how much the rate rise will be so now signalling the pretence of CB independence.

Pastor Brunson court hearing still a month away.

This is going to be a rollercoaster ride with lashings of slippage.

 

[Ludwik Chodzko-Zajko IG]

24% / 625 bp hike

[Caseynotes]

Ha, no half measures then. USDTRY bounces off 60000 and already heading back up.

[Ludwik Chodzko-Zajko IG]

[Caseynotes]

Now that Erdogan has made himself head of the country's sovereign wealth fund perhaps he could appoint himself head of the central bank too.

See he has restarted his 'hold TRY not $' campaign, if only he had some kind of apparatus to make people do as he says.

 

[Caseynotes]

USDTRY back to pre-rate rise level with Erdogan's comments restricting CB room to manoeuvre.

https://www.forexlive.com/news/!/turkish-lira-erases-post-cbrt-rate-hike-gains-20180918