Turkish Lira Strategy: A Chance Once Every Few Years?

Yesterday, the Central Bank of Turkey

late liquidity policy rate

emergency rate hike

raised it by 3% from 13.5 to 16.5.

Due to differences in will between the president and the central bank, an unstable situation

and the rise in the dollar caused capital withdrawal from emerging markets

and a continued decline in the Turkish lira could not be stopped.

However, with this emergency rate hike

Turkish lira 20 yen

Dollar-Turkish lira 5.0

is the defense line the central bank wants to protect??

I believe buying Turkish lira is effective.

As a long-term holding strategy, it seems favorable.

Immediately, across all accounts

TRY/JPY long

USD/TRY short

are being pursued as the strategy.

Because it is a minor currency, there may be country risk, but

this rate hike

is expected to have a strong impact.

As it is a long-term strategy, risk management and capital management must be done properly.

Market like this is very similar to the USD/JPY 75 yen level, right?

It is the line where the government and the Bank of Japan intervene.

When the central bank shows direction urgently like this, it is easy to understand.

However, the difference with the yen is that this is a minor currency.

There is this risk, though...