Turkish Lira Continues to Decline After Interest Rate Decision

Turkish Lira continues to decline after the interest rate decision. Already depreciating TL continues to depreciate after the interest rate is kept constant. With the decision taken at the PPK meeting held yesterday, the policy rate was kept constant at 10.25. The Central Bank of the Republic of Turkey (CBRT) to increase its policy rate in September, this meeting had decided to increase the interest rate increase expectations. While the markets were in this expectation, TL was priced positively during the week. However, the decision that the interest rate will be kept constant from the meeting held yesterday brought a loss of confidence in the markets. While central banks such as the FED and ECB are striving to establish a healthy communication with the markets, they aim to signal the measures they will take in advance and not cause a shock in the markets. However, the CBRT repeatedly drew attention to its tightening policy within the scope of "normalization" and announced that they expected high inflation in the last quarter of the year. In this context, the center increased the interest rate in September, but did not see it necessary in October. However, on the contrary, inflation is expected to rise with the cost effect from this month on. On the other hand, the possibility of the US incentive package to remain after the election and the outcome of the election will play a major role in the pricing of gold in the near term. In this sense, while analysts expect the downward movement ounce of gold to be at the border that will not disrupt the trend, they say that the gold support of 478 TL in grams seems difficult in the short term with the continuation of the rise towards 8.0 in the currency. The 500 TL limit is considered the new level and is the closest resistance.