The Turkish lira strengthened today as Barclays Plc said that demand for the currency used in carry trade will remain despite the interest rate cut earlier this month.
The Central Bank of the Republic of Turkey lowered the average interest rate to 5.75 percent on October 4, the lowest level in 11 months. The bank also decreased the upper end of its interest-rate corridor by 150 basis points last month. Despite that, Barclays claimed that the inflow of foreign capital in the country will continue. Carry traders can be particularly interested in the lira because borrowing costs remain very high.
USD/TRY fell a little from 1.8031 to 1.8024 as of 13:40 GMT today.
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