BUZZ-COMMENT-The end of tightening cycle might save Turkish lira

Credit: REUTERS/DADO RUVIC

Feb 22 (Reuters) - Perhaps the end of a series of interest rate hikes that have lifted Turkey's main interest rate to 45 percent can end the run on its currency that has driven it to a record low ahead of Thursday's monetary policy meeting.

All of the 11 economists polled by Reuters expect the Turkish central bank to end the tightening cycle that has lifted the repo rate from 8.5% last May.

While the dramatic increase in interest rates has not stopped the lira from falling, the adoption of more conventional monetary policy has led to positive ratings reviews and some foreign investment.

The latter is crucial if the lira is to rebound and with the end of the tightening cycle providing relief for the economy, more foreign asset managers may be attracted by an interest rate that stands far above those for other free-floating currencies that are popularly traded.

The broader environment in financial markets which is conducive to carry trade favours the lira and the surge for Turkey's stock market to a record high should encourage investment in the nation's currency.

For more click on FXBUZ

USDTRY and Turkish stocks https://tmsnrt.rs/3SMmVz9

(Jeremy Boulton is a Reuters market analyst. The views expressed are his own; editing by David Evans)

((jeremy.boulton@thomsonreuters.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.