The Turkish lira climbed 2% on Thursday to its highest level in two weeks, boosted by US bond markets and forecasts from Fitch Ratings and Goldman Sachs for delayed rate cuts that helped it pass all-time low from last week.
The currency rose over four of five trading days and stood at 8.42 against the dollar at 1705 GMT, its best since May 26.
It hit a record intraday low of 8.88 last week, after President Tayyip Erdogan said he spoke to the central bank governor about lowering interest rates over the next two months.
The rise in US yields this year weighed on the lira, the worst of the emerging markets. But data showing rising US inflation had little effect on bond markets on Thursday, opening the door for the Turkish rebound.
Fitch, the rating agency and Wall Street Bank Goldman both said premature rate cuts were a risk for the reading given pressure from Erdogan.
But they also predicted that the central bank would wait until the fourth quarter to ease its policy amid inflation nearing 17% for most of the year and the currency depreciation, which raises the prices of commodities. imports.
Meanwhile, the central bank’s net international reserves recorded a rare rebound last week, to $ 14.69 billion from $ 12.44 billion. Reserves remain severely depleted after costly state interventions in the foreign exchange market in 2019 and 2020.
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