American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Investing

USD/TRY forecast: Lira outlook darkens ahead of CBT decision

by admin December 24, 2024
December 24, 2024
USD/TRY forecast: Lira outlook darkens ahead of CBT decision

The USD/TRY exchange rate has surged to a record high as the US dollar index (DXY) soared and as the Central Bank of the Republic of Turkey (CBRT) prepares to cut interest rates. The pair soared to a high of 35.25, up by about 22% this year.

CBRT interest rate decision

The USD/TRY exchange rate will be the key forex pair to watch this week as the CBRT concludes its two-day monetary policy meeting. 

Economists polled by Reuters expect the bank to deliver its first interest rate cut of the year this time. Most analysts see it slashing by 250 basis points, a move that will bring the benchmark interest rate to 47.5%. 

The rate cut comes even as Turkey’s inflation issues continue. While the headline Consumer Price Index (CPI) has retreated from 71.60% in July to 47.09%, the recent pace of slowdown have not been as quick as expected.

The most recent data showed that the headline Turkish inflation dropped from 48.58% in December to 47% in November. That decline was lower than the median estimate of 46.60%. 

In October, Turkey’s inflation dropped to 48.58%, also higher than the expected 48.20%, while a month earlier, inflation fell to 49.38%. These numbers mean that Turkey still has one of the highest inflation rates globally. 

Therefore, cutting interest rates now may make the already bad situation worse. It may also lead to some credit downgrades from the top credit rating agencies. 

Central banks typically maintain high interest rates when inflation is high to slow down spending. This partly explains why the Turkey’s inflation has fallen from over 75% in May to today’s 47%. As such, there is a likelihood that prices will resume their uptrend in 2025.

The CBRT will cut rates because of the slowing Turkish economy. The most recent numbers showed that the economy grew by 2.1% in the third quarter, missing analysts estimates as businesses complained about the soaring borrowing costs. In a note, analysts at Citi said:

“The combination of growing evidence of an economic slowdown and historically tight financial conditions faced by bank-dependent borrowers also lends support to our view that a 250bp cut in December is likely. However, we concur that a less aggressive easing cannot be entirely ruled out.”

Strong US dollar 

The USD/TRY exchange rate has surged because of the strong US dollar index, which has jumped to over $108. Its 8% rally from its lowest level this year happened because of the fairly strong US economy, which has avoided a hard landing.

The dollar rose after the Federal Reserve made its last interest rate decision of the year on Wednesday last week. It slashed interest rates unchanged by 0.25% as the dot plot pointed to two more cuts in 2025. 

As a result, the Turkish lira has joined other emerging market currencies in a strong downtrend as the dollar surges. For example, the Brazilian real has crashed to a record low, while other currencies like the Chinese yuan and Russian ruble have slipped.

USD/TRY technical analysis

USD/TRY chart by TradingView

The daily chart shows that the USD/TRY exchange rate has been in a strong uptrend, and is sitting at a record high of 35.25. It has moved above the upper side of the rising wedge, a popular bearish reversal sign.

The pair has remained above all moving averages. Also, all oscillators have continued rising, a sign that the pair is gaining momentum. Therefore, the path of the least resistance is higher, with the next  level to watch being at 35.

The post USD/TRY forecast: Lira outlook darkens ahead of CBT decision appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Elon Musk’s AI startup raises $6B from BlackRock, Nvidia, AMD, and others
next post
Nifty Bank Index best and worst performers in 2024 revealed

Related Posts

What is the future of the Zimbabwe ZiG...

July 9, 2025

Twilio stock price forecast: technicals point to a...

February 13, 2025

Rio Silver: Leveraging 25 Years of Mining Experience...

April 30, 2024

Nu Holdings stock price forecast after earnings: still...

August 16, 2025

First Assays Confirm Thick Copper Zone and Significant...

May 2, 2024

Will Dell’s reentry into S&P 500 after 11...

September 25, 2024

Avoid MicroStrategy stock: buy MSTU and MSTX ETFs...

November 21, 2024

Top 3 new Solana crypto tokens to buy...

May 9, 2025

Exceptional Gold Intercept at Base of New 952koz...

February 1, 2024

AWALÉ ANNOUNCES C$10 MILLION “BOUGHT DEAL” PRIVATE PLACEMENT...

April 19, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • FBI raid on John Bolton’s home in Washington linked to classified documents

      August 25, 2025
    • Argentine senate deals blow to Milei’s austerity agenda with university budget boost

      August 25, 2025
    • Jackson Hole Symposium: what Powell said about economic effects of Trump’s tariffs

      August 25, 2025
    • At Jackson Hole, Fed Chair Powell signals possible cuts while warning of uncertainty

      August 25, 2025
    • Trump threatens to fire Fed Governor Lisa Cook amid mortgage fraud allegations

      August 25, 2025

    Categories

    • Business (3,763)
    • Investing (2,783)
    • Latest News (2,048)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved