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28 Jan 2014
Flash: Turkish Lira subject of Emergency meeting - Danske
FXstreet.com (Barcelona) - Christin Tuxen, Senior Analyst at Danske Bank notes that focus in currency markets will be on the extent to which the recent EM jitters settle.
Key Quotes
“Notably, the Turkish central bank (TCMB) has announced that it will hold an emergency meeting today to discuss the unfolding crisis in the Turkish markets. The major sell-off in the lira is clearly worrying the TCMB.”
“Even though it is hard to justify an aggressive tightening of Turkish monetary conditions – particularly in the present state of uncertainty about both Turkish and global growth – we think that the TCMB will hike its key policy rate – most likely by 200 to 300bp – but the uncertainty about the size of the possible rate hike is obviously large.”
“As a consequence we do not necessarily think a 200bp hike will do much on its own to stabilise the lira.”
Key Quotes
“Notably, the Turkish central bank (TCMB) has announced that it will hold an emergency meeting today to discuss the unfolding crisis in the Turkish markets. The major sell-off in the lira is clearly worrying the TCMB.”
“Even though it is hard to justify an aggressive tightening of Turkish monetary conditions – particularly in the present state of uncertainty about both Turkish and global growth – we think that the TCMB will hike its key policy rate – most likely by 200 to 300bp – but the uncertainty about the size of the possible rate hike is obviously large.”
“As a consequence we do not necessarily think a 200bp hike will do much on its own to stabilise the lira.”