USD/TRY challenges 9.5000 following the CBRT decision

• USD/TRY moves sharply higher and approaches 9.5000.
• The CBRT reduced the One-Week Repo Rate by 200 bps.
• Turkey’s Consumer Confidence eased to 76.8 in October.

The Turkish lira resumes the downside and pushes USD/TRY to new all-time highs around 9.50 on Thursday.

USD/TRY higher post-CBRT

The capacity of the Turkish central bank (CBRT) to surprise everybody remained intact on Thursday.

Indeed, USD/TRY pops to fresh all-time highs after the CBRT caught markets off guard and reduced the One-Week Repo Rate by an unexpected 200 bps to 16.00%, even below the latest level of the Core CPI recorded in September (16.98%).

In the statement, the central bank reiterated that the current elevated inflation is mainly due to transitory factors. These temporary factors behind high consumer prices, according to the bank, leave limited room to reduce the policy rate further in the next months… (wait, what?)'

In the meantime,  futures of USD/TRY trade around 9.5800.

USD/TRY key levels

So far, the pair is up 2.16% at 9.4147 and a drop below 9.2467 (10-day SMA) would aim for 9.0107 (20-day SMA) and finally 8.8317 (monthly low Oct.4). On the other hand, the next up barrier lines up at 9.4707 (all-time high Oct.21) followed by… the moon.