On Thursday, the Central Bank of the Republic of Turkey (CBRT) cut rates from 14% to 13%. USD/TRY is trading above the 18 level and Kit Juckes, Chief Global FX Strategist at Société Générale, expects the pair to enjoy further gains.

Higher inflation

“With inflation just below 80%, it’s no surprise that USD/TRY is above 18 this morning and we expect it to go higher still. Which will help keep inflation up...”

“The CBRT’s problem is that with no credibility, their agreements may be right, but the lira’s fall will make a nonsense of them anyway.”