No LIMITS on the Turkish Lira
Updated
The Lira is under pressure even after the Central Bank of Turkey hiked its benchmark one-week repo rate by 200 bps to 10.25 percent during its September meeting, surprising markets that had forecast the rate to remain unchanged. Policymakers said the decision aims to restore the disinflation process and support price stability as the lira has hit an all-time low. Turkey's economic activity is recovering markedly in the third quarter owing to gradual steps towards normalization and the strong credit impulse, while inflation rate is high
Note
It's seems the rally is as a result of fears that Turkey might be entangled in a regional conflict between Armenia and Azerbaijan. Treasury specialists in the country are worried about the price getting to 8.00x. If it does, it might trigger the collapse of local banks in the country.Note
I personally feel that this might be bad as would prompt a domino effect given the global financial markets are vulnerable. Question is, what happens next
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