Central Bank of the Republic of Turkey announced its latest monetary policy decision at 12:00 pm BST. The Turkish central bank was expected to leave rates unchanged with the 1-week report rate staying at 19.00%. However, investors were offered a dovish surprise with the rate being unexpectedly cut to 18.00%. As a result, Turkish lira weakened against EUR and USD. Both USDTRY and EURTRY jumped around 1.5% following the decision announcement.
Given that Turkish inflation runs rampant with CPI reaching 19.25% YoY in August, the move looks to have a political trigger behind it. While it may play into Erdogan's unorthodox view on monetary policy, it is highly unlikely that it will help Turkey cope with inflation and other economic issues.
Start investing today or test a free demo
Open account Try demo Download mobile app Download mobile app
USDTRY jumped following an unexpected rate cut from CBRT and for a brief moment traded at the highest level in history. Source: xStation5
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
