Turkish Lira Off 2-day Low Against U.S. Dollar After Turkey Rate Cut

By | May 21, 2020
Turkish Lira Off 2-day Low Against U.S

The Turkish Lira trimmed its early losses against the U.S. dollar in the European session on Thursday, after Turkey’s central bank reduced its interest rates by 50 basis points as widely expected, as coronavirus pandemic dampened exports, domestic demand and tourism.

The Monetary Policy Committee of the Central Bank of the Republic of Turkey, led by Governor Murat Uysal, cut the policy rate, which is the one-week repo auction rate, to 8.25 percent from 8.75 percent.

The decision came in line with expectations.

The bank observed that despite the recent weakness in the Turkish lira due to global developments, international commodity prices, especially crude oil and metal prices, affect inflation outlook favorably.

The Turkish Lira recovered to 6.7808 against the greenback, from a 2-day low of 6.8109 hit at 6:00 am ET. If the Lira rises further, 5.9 is seen as its next resistance level.