Turkey: Markets yawn at rate cut due to broken transmission mechanism (2 charts)

  • The CBRT cut by 150bps to 10.5%, bringing cumulative cuts to 350bps in last 3 meetings and the real policy rate to -73%

  • TRY is flat at time of writing as macroprudential measures take over for repo rate as key monetary policy instrument

  • "Liraization" can contain rates and currency for now, but will ultimately blow up in CBRT's face; retain Sell on TRY

October 20th, 2022
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