Turkey's Central Bank Still Fighting Inflation Legacy After Lira Crisis
The CBRT has contained much of the direct exchange-rate pass-through after the lira collapse, but inflationary habits from the currency crisis remain entrenched.
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The Central Bank of the Republic of Turkey has made progress in limiting direct exchange-rate pass-through following the earlier lira collapse. However, it has not yet broken the inflationary habits left behind by the currency crisis.
The prior CBRT was described as having helped break the lira, while today's central bank has contained much of the immediate FX passthrough. Despite that containment, underlying inflation behavior remains a challenge.
The situation highlights Turkey's shift from an acute currency crisis to a more persistent inflation culture.
Source: FXStreet Forex News