According to Zerohedge,
when Turkish president Erdogan sacked the now former Turkish central bank head Ceitnkaya two weeks ago because the latter refused to ease monetary policy despite the country’s surging inflation and tumbling currency, it was no longer a question if the central bank would cut rates but by how much.
We got the answer this morning, when the CBRT (and it new head) announced that it slashed the benchmark 1-week repo rate by a whopping 425bps, from 24% to 19.75%, almost double the 250bps consensus expectation of a Bloomberg survey, due to “a moderate recovery in the economic activity.”
In the first trading hour after big rate cut, the market was indecisive about next move. But now USD/TRY is rely on bullish trendline, which could be considered as a strong support. Rate cut is obviously bullish for USD/TRY, but anything can happen. The important will be the next 3-10 tradings days, where is the big probability of new trend building up.
This article can NOT be considered as a trading advice.
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