INTEREST RATE HIKE EFFECT ON USD/TRY SHORT LASTED
At its monetary policy meeting on November 19, CBRT increased the policy rate by 475 basis points to 15 percent in line with the expectations. With this move, the CBRT cut the policy rate to the weighted average funding cost and once again set its main policy instrument as the one-week repo rate. Thus, we see that the Bank has taken an important step in terms of simplification and predictability.
CBRT also announced that it will continue the frequency of the monetary stance with determination until low inflation is achieved. JP Morgan, on the other hand, was among the important developments that it described the decision to increase the interest rate taken in the meeting held under the leadership of Naci Ağbal, the new head of the Central Bank, as cautious. With the appreciation of TL assets after this decision of the CBRT, there was a retreat movement of up to 7.50 in USDTRY. However, with the return from this level, it is seen that the exchange rate stabilized around 7.60 on the last trading day of the week.
On the USA side, while the precautionary measures continue to tighten due to the increasing Covid-19 cases, the announcement that Biden, who was elected as the US president, will not close the economy due to Covid-19 led to an increase in risk appetite. On the other hand, it is seen that the exit from dollar assets has gained momentum with positive vaccine news. While the US side was calm in terms of data flow on the last trading day of the week, we will be monitoring manufacturing and service PMI data today.
In the technical view of the USD/TRY, it is seen that some recovery has intensified due to the pricing of the interest rate hike expectations for the CBRT. Especially in the continuation of this trend, the increases may gain momentum in the closings above the 7.70 resistance. Thus, we can see that the buying potential in the exchange rate continues up to 7.77. However, in the opposite scenario, if the direction is down again, we follow the declines around the 7.62 and 7.55 support levels.