Will the Allure of the Turkish Lira Diminish by 2025?

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Will the Allure of the Turkish Lira Diminish by 2025?

BS Finance - The Central Bank of the Republic of Turkey (CBRT) has lowered the policy interest rate by 250 basis points, bringing it down to 47.50%. This decision aims to manage both the real value of the Turkish lira and inflation expectations in the market. The following key points were highlighted in the announcement of the decision:

  • The flat trend in the core inflation that began in November continued with a decline in December.
  • An improvement in pricing behavior was observed while aiming to balance the demand for the Turkish lira.
  • A change was made in the CBRT's operational framework, deciding to set the repo auction interest rates with a margin of ±150 basis points.

This policy change may cause fluctuations in the exchange rate and could also affect consumer credit costs. The extent to which it will be beneficial in the fight against inflation remains a topic of debate.

Forex Only USDTRY: Following the CBRT's 250 basis points rate cut, the USD/TRY exchange rate is trading around 35.20. The depreciation of the Turkish lira stands out as the market's reaction to the interest rate decision. Short-term volatility against the dollar is expected to continue.

EURTRY: The Euro/TL rate has risen to 36.72, marking an increase of 0.69%. This rise of the Euro against the Turkish lira is linked to both the European Central Bank's tight monetary policy and the expansionary policies in Turkey.

USDJPY: Trading at 157.53, the pair has increased by 0.15%, indicating the continued weakness of the Japanese yen. The global strengthening trend of the dollar increases upward pressure on the pair, while the low-interest environment in Japan supports this trend.

Stock Market Only BIST 100: The index showed an increase of 0.41%, reaching 9,956.4. In sectors where investor interest has intensified following the rate cut, rises have been supportive.

BIST 30: The index recorded a rise of 0.35%, reaching 10,918.9.

Crypto Only A law mandating cryptocurrency users to provide identification for transactions exceeding $425 in Turkey indicates tightening regulations.

JUST IN: Turkey has passed a law requiring cryptocurrency users to provide identification data for transactions exceeding $425.

Bitcoin: It declined to 95,912, experiencing a drop of 3.54%. Recent profit-taking has influenced this decrease.

Ethereum: Trading at 3,379, it recorded a drop of 3.36%. The weakness of Ethereum runs parallel to the negative sentiment in the overall crypto market.

Commodity Only Brent Oil: The price of Brent crude oil rose to 73.95, marking an increase of 0.46%.

Gold: The price of gold per ounce increased to 2,628.1, yielding a gain of 0.44%.

Will the Attractiveness of TL Decrease in 2025? The article first appeared on Black Swan Finance.