USD/TRY retreats from historical tops on CBRT decision

After reaching fresh all-time tops near 3.79 earlier in the session, USD/TRY has now receded to the 3.7500 neighbourhood following the intervention of the CBRT.

USD/TRY trims gains post-CBRT

TRY is now recovering part of the initial sharp losses vs. the buck after the Turkish central bank (CBRT) cut the FX RRRS by 50 bp in order to boost liquidity. The central bank added that it will keep monitoring the excessive volatility in the FX markets while further measures have not been ruled out.

The central bank has also cut the interbank borrowing limit to TRY22 billion, emphasizing that measures are aimed to tackle the unhealthy price formation.

Looking ahead, the perspective for the Turkish currency remains fragile. In fact, TRY is already losing more than 5% vs. the greenback so far this year, all amidst recent warnings from agency Moody’s on heightened risks facing the domestic banking system, the almost permanent threat of terrorist attacks and the continuation of the conflict between the government and the central bank.

USD/TRY key levels

At the moment the pair is up 1.05% at 3.7527 facing the next hurdle at today’s fresh all-time high at 3.7872. On the other hand, the next support lines up at 3.7088 (low Jan.10) followed by 3.6370 (low Jan.9) and then 3.5592 (20-day sma).