Ups the Intraday liquidity facility to double size

  • Banks’ borrowing limits at the Central Bank of the Republic of Turkey (CBRT) Interbank Money Market for O/N transactions have been reduced to zero to be effective as of 22 November 2017.
  • Banks’ limit for the intraday liquidity facility will be increased to twice the size of Interbank Money Market borrowing limits valid on 21 November 2017
  • Move to increase the weighted average cost of funding by 25bps
  • Turkey Presidential adviser Gedikli: Central bank needs to be more proactive against the market
  • Earlier President Erdogan was critical of the CBRT, saying they were on the wrong path in using high interest rates to fight inflation
  • USDTRY moved from 3.85 before the weekend to 3.92 yesterday and up to 3.97 this morning
  • here’s the link to the statement

Despite hiking the effective ending cost by 25bps, Erdogan’s repeated criticism of the CB tightness is finally giving the final stab to a political and geopolitically battered currency.
Besides this final stab, Turkey’s been struggling with its economy,war at it’s borders, high reluctance of EU members to talk to them , let alone to give the access to the Union.The latest shift to the right in various European elections haven’t improved Turkey’s (doubtful on many fronts) conditions.
I am long and have been long most of the time,advocating for a long time USDTRY should be around 4 rather than 3 and here we are very close now all of a sudden. I am not sure where it’ll actually stop after  the CBRT move open as speculation driven moves like this could take it even further. Hence I will take off 3/4 of my position at my 4 target and leave 1/4 open.


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