Silver Prices Plunge in Asian Trade as Dollar Strength Triggers Fresh Precious Metals Sell-Off 
Japan Economy Poised for Q4 2025 Growth as Investment and Consumption Hold Firm 
BOJ Holds Interest Rates Steady, Upgrades Growth and Inflation Outlook for Japan 
Asian Stocks Slip as Tech Rout Deepens, Japan Steadies Ahead of Election 
RBI Holds Repo Rate at 5.25% as India’s Growth Outlook Strengthens After U.S. Trade Deal 
BOJ Rate Decision in Focus as Yen Weakness and Inflation Shape Market Outlook 
Dollar Steadies Ahead of ECB and BoE Decisions as Markets Turn Risk-Off 
China Extends Gold Buying Streak as Reserves Surge Despite Volatile Prices 
U.S.-India Trade Framework Signals Major Shift in Tariffs, Energy, and Supply Chains 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Dow Hits 50,000 as U.S. Stocks Stage Strong Rebound Amid AI Volatility 
Trump’s Inflation Claims Clash With Voters’ Cost-of-Living Reality 
The central bank of Turkey (CBT) is expected to hike the overnight lending rate in the monetary policy meeting scheduled to be held today. Yesterday’s assassination of the Russian ambassador highlights the laws of unintended consequences; however, markets did not react significantly to it.
Consensus expectations are for the CBT to hike overnight lending rates by 25 basis points to 8.75 percent at today’s meeting, leaving the repurchase rate and the overnight borrowing rate unchanged at 8.00and 7.25 percent respectively, Commerzbank reported.
USD/TRY illustrates a 20 percent appreciation since September, which is a reflection of the stronger USD and deteriorating sentiment towards EM. The lira and lira denominated assets would underperform once sentiment towards EM worsened and this proved to be the case. 2-year rates currently trade around 11 percent, which illustrates the depth of market scepticism towards CBT.
As long as CBT remain reluctant to hike rates the lira will feel the pain. CBT might feel they can get away with negligible rate hikes but they are ignoring the paradigm shift in US rates and the USD. The longer this goes on, the worse it will get for the lira and eventually CBT will have to undertake emergency rate hikes of around 250–300 bps.
"We’ve seen this cycle play out so many times in the past it’s actually become boring. If CBT are serious about reining in lira weakness it will require a durable positive real interest rate profile of around 2.5-3.0 percent. CBT need only look north and see what CBR achieved in the last few years," the report mentioned.
