- Lira extends Thursday’s gain to reach the highest point since Sept. 25.
- Turkish central bank’s big rate hike draws bids for the currency.
The Turkish lira (TRY) fell to 7.5112 per US dollar early Friday, its highest level since Sept. 25.
The battered currency picked up a strong bid on Thursday, rising over 2% from 7.6921 to 7.5281 after the nation’s central bank lifted the benchmark interest rate by a whopping 475 basis points to 15%, pledging a stricter approach to controlling the double-digit inflation.
The move matched the lofty expectations built in the market following President Recep Tayyip Erdogan’s recent decision to install a new economic team.
“Lira appreciation is a de facto loosening in financial conditions and good for Turkey,” Robin Brooks, Chief Economist at the Institute of International Finance (IIF), tweeted Thursday.
The currency has chalked up an impressive recovery from the record low of 8.5777 over the past two weeks. Even so, it is still down 26% on a year-to-date basis.
At press time, the USD/TRY pair is trading at 7.5387, having almost tested the 100-day Simple Moving Average (SMA) of 7.5039 early today. That technical line was last probed in November 2019.
Support: 7.5039 (100-day SMA), 7.4124 (Sept. 10 low)
Resistance: 7.7229 (Thursday’s high), 7.7959 (Nov. 17 high)