Will the collapse of the Turkish lira continue? by Investing.com

Investing.com – Echoes of a rate cut remain in place despite rising inflation. As it approached its all-time low today, Friday, due to the exodus of foreign investors, the Turkish lira only protected bargain hunting operations in the local market, this which somewhat limited the losses.

Few expected an unexpected cut in central bank interest rates while giving little indication of their eventual level.

The lira, which has been subject to large swings and a slowdown in emerging markets for several years, fell to 8.8348, down 0.83% and approaching its June low of 8.880.

The Turkish Central Bank has decided to lower the interest rate by 100 basis points on repurchases, “repo” for a week, to 18%.

Twenty-three economists surveyed by “Bloomberg” all but one expected the Turkish Central Bank to keep the key interest rate at 19% today, given surprisingly high consumer prices.

The pound also fell on Thursday when the bank cut its key rate by 100 basis points to 18% despite rising inflation, providing the stimulus long sought by President Recep Tayyip Erdogan and heightening analyst concerns about the political interference.

The central bank has given little indication of the future direction of monetary policy, but Societe Generale, Barclays, JP Morgan and Goldman Sachs (NYSE 🙂 have predicted further rate cuts in the coming months.

The lira is expected to hit the 9 vs. levels if it continues to decline against the US dollar, which was bolstered by the governor of the US Federal Reserve, who said it would start before the end. of the year. However, the dollar has not fully consolidated due to the pressures of China’s Evergrande Crisis.