CBRT

The Lira turned back onto recovery road leading GBP/TRY, USD/TRY and EUR/TRY to topple on Thursday after the Central Bank of the Republic of Turkey (CBRT) more-than met expectations with its latest interest rise, prompting some analysts to suggest forecast upgrades are on the way.

The Lira outlook has improved since the Central Bank of the Republic of Turkey (CBRT) raised interest rates this week, leading Commerzbank to scrap forecasts for further punishing declines in the coming weeks, with the Turkish currency now expected to consolidate near to current levels into year-end.

The Lira leapt higher against the Dollar, Pound and Euro on Thursday after the Central Bank of the Republic of Turkey (CBRT, TCMB) raised interest rates and announced a landmark shift in how it sets policy, placing the Turkish currency on course to reverse its summer sell-off, according to some analysts. 

The Lira was steady against major currencies on Wednesday even after reported remarks from President Recep Tayyip Erdogan that appeared to cast doubt over the country's interest rate outlook ahead of central bank meeting that is of the utmost importance to the outlook for the Turkish currency. 

The Lira languished at historic lows on Friday after the Central Bank of the Republic of Turkey (CBRT) disappointed investors by neglecting to lift interest rates following its October meeting, although even before then some analysts had warned that EUR/TRY is one course for the large round number of 10.0. 

The Lira rallied further on Friday after regulators relaxed restrictions on currency transactions following a surprise interest rate rise from the central bank, although analysts say the road toward stability is a long one and that rate setters will need to go further to prevent fresh losses befalling the Lira.