Recep Erdoğan is subject to misbelief that higher inflation follows higher policy rates. Therefore he fires every few months staff from the Central Bank of the Republic of Turkey (TCMB) in the hope they will follow his misconception of growth economics and money theory finally. And obviously he has been sucessful now. Instead of the expected 1% rate cut the Central Bank slashed its base rate by 200 basis points to 16% yesterday.
The market was shocked of course and TRY pairs lost dramatically yesterday:
USDTRY closed at 9.5182 (+3.24%)
EURTRY closed at 11.0632 (+ 2.99%)
TRYJPY closed at 11.976 (-3.38%)
The sell off is not over yet. All pairs are down roughly 1.10% again at time of writing. With respect to the current policy rate all should be priced in now. The problem is that nobody knows what the central bank will do next and if Erdoğan has learned anything from the price action. I am afraid that is not the case yet.
The currency pair USDTRY is just 4% away from the big 10 level. At all-time highs you cannot grab any information from technical analysis unfortunatly.
Good luck,
Sebbo