Turkey: Lira pressure to increase after irresponsible rate cut
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The CBRT cut its policy rate by 100bps to 13% despite c80% inflation, against consensus expectations for a hold
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This takes the real policy rate to a foreboding -66.6% and will fuel further currency and price pressure
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We think only a severe currency crisis will prompt a policy reversal, and retain our Sell recommendation on the TRY
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This report is independent investment research as contemplated by COBS 12.2 of the FCA Handbook and is a research recommendation under COBS 12.4 of the FCA Handbook. Where it is not technically a research recommendation because the subject of the research is not listed on any European exchange, it has nevertheless been treated as a research recommendation to ensure consistent treatment of all Tellimer's research. This report has been produced by the analyst(s) named above (the "Analyst").
The Analyst certifies that the views and forecasts expressed in this report accurately reflect their personal views about the subject, securities, or issuers specified herein. In addition, the Analyst certifies that no part of their compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in this report.