The Turkish lira now finds some respite and advances moderately vs. the greenback, pushing USD/TRY back to the 7.9000 regions on Wednesday. Following daily highs above the 8.0000 mark, USD/TRY now recedes to the negative territory as the lira seems to have met some fresh buying interest.
USD/TRY now reverses two consecutive daily pullbacks after the Turkish currency appears to have met some buyers in the vicinity of the 8.0000 yardsticks on Wednesday. Following the recent events surrounding the CBRT, the cost of borrowing liras surged to as high as around 1,400% on Tuesday amidst the rising exodus from Turkish assets and the desperate need for liras by foreign investors in order to close positions. It is worth recalling that after the currency crisis back in 2018, local lenders severely regulate the amount that can be lent to foreign investors (via swaps). This measure aims at making it extremely expensive to short the lira.