Turkish Lira to remain under pressure

CBRT are likely to keep rates on hold at 7.5% (repurchase rate) and 10.75% (Over-night lending rate) at today's MPC meeting. 

Governor Basci already signalled that while the central bank will seek to amend its overall policy mix towards a simplified single-rate policy in the coming weeks, he did not expect a change in terms of impact, i.e. no tightening or loosening of policy. 

"That being the case today's meeting will likely be a non-event, at least in terms of rate moves. What this means is that there will at least be no major policy innovation to support TRY in the short term, meaning that coming into September risks are very much tilted to the upside for USD-TRY", says Commerzbank. 

In any case, one has to question whether even marginal rate hikes at this stage will do much to support TRY. 

"Given broader sentiment towards emerging markets it seems that further TRY weakness is inevitable", added Commerzbank.