The lira is down by 1.2% against the dollar at the moment
USD/TRY fell to a low of about 6.01 on the back of the CBRT decision here last week but since then the lira has been on a steady path of declines as the same fundamental landscape continues to dominate the picture.
As mentioned then, Erdogan's one sentence is a game changer for the lira as it basically means that the CBRT is not going to be able to get away with more rate hikes in the future. So, whatever independence talk that was touted ahead of the central bank decision means little in the grand scheme of things - more so after Erdogan mentioned that his "patience has its limits" when it comes to the CBRT and higher interest rates.
If that is a threat to the central bank to not challenge him, then the message could not have been clearer. The lira's decline from hereon may not see a similar pace or a straight line trajectory, but essentially the currency is still facing a mountain of challenges to recover as long as the same issues persist; that of high inflation, excessive current account deficit, and foreign debt. Oh, not to forget Erdogan as well.
