Turkish Lira Rallies Despite Interest Rate Cut

The Turkish lira rallied today despite the fact that Turkey’s central bank decided to lower its one-week repo auction rate.
The Central Bank of the Republic of Turkey decided to cut its benchmark interest rate from 19.75% to 16.50% today. The decision followed the cut by 425 basis points in July. The central bank commented on the decision:

Considering all the factors affecting inflation outlook, the Committee decided to reduce the policy rate by 325 basis points. At this point, the current monetary policy stance, to a large part, is considered to be consistent with the projected disinflation path.

USD/TRY dropped from 5.7443 to 5.6518 as of 21:09 GMT today. EUR/TRY declined from 6.3279 to 6.2552, touching the low of 6.1975.

If you have any questions, comments, or opinions regarding the Turkish Lira, feel free to post them using the commentary form below.

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