Should the bank hike rates the Turkish Lira could strengthen against a number of currencies.
This article is originally referred from IronFX News.
On Thursday 13th of September, at 11:00 (GMT), the Central Bank of Turkey (CBT) will announce their interest rate decision.
- A Reuters poll, suggests that the Bank’s decision will be of an interest rate hike of 425 basis points raising interest rates from 17.75% (top rate) to 22.00%, however, please note that risks could be tilted to the upside.
- Should the bank hike rates the Turkish Lira could strengthen against a number of currencies.
- Be advised that the TRY has been weakening in the recent past as economic circumstances and geopolitical matters were quite unfavorable for the country. However, the high inflation rate (+17.90% YoY in August) could provide enough reason for the CBT to hike rates.
- On the other hand, Turkish governmental intentions for growth could contradict a high interest rate hike.
- Should CBT fail to hike rates substantially the Turkish lira could tumble.
We see the case for the CBT to raise the interest rate by 425 basis points.
Original Source: IronFX News