The drop in the Turkish lira over the past month has already prompted the central bank (CBRT) to nudge up the average cost of the funding it provides to commercial banks and to begin auctioning non-deliverable forward contracts in an effort to shore up the currency. But so far these measures have had little effect on the market. History suggests that we’re getting close to the stage where the CBRT might now consider a more aggressive tightening of policy.
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