USD/TRY climbs to all-time highs near 34.0000 after CBRT

• The Turkish currency sinks to record lows against the US dollar.
• The CBRT left its one-week repo rate unchanged at 50.00%.
• The central bank said it would maintain its restrictive stance.

The Turkish lira weakens further and sends USD/TRY to new all-time highs near the 34.0000 barrier on Tuesday.

CBRT kept rates unchanged as expected

USD/TRY extended its uptrend for another session on Tuesday, marking its fifth consecutive daily gain so far.

Further losses in the TRY accelerated after the Turkish central bank (CBRT) kept its one-week repo rate at 50.00% for the fifth consecutive month at Tuesday’s meeting.

The bank indicated that core monthly inflation rose slightly in July but remained below the second-quarter average. It also reiterated its commitment to maintain a tight monetary stance until it sees “a significant and sustained decline in the monthly core trend”, and expectations are in line with the forecast range.

The statement also noted that the monetary policy stance would be tightened if a significant and persistent deterioration in inflation is anticipated.

It should be noted that since 2022, the pair has closed in negative territory in only three months (November 2022, August 2023 and May 2024). During that time, the pound depreciated around 165% against the greenback.

USD/TRY levels to watch

At the time of writing, USD/TRY is up 0.49% to 33.8716 and faces the next barrier at the all-time high of 33.8737 (August 20). On the downside, there is tentative support at the 55-day SMA of 32.9085, backed by the weekly low of 32.7623 (July 26) and July’s 32.4595 (July 3).