USD/TRY: Options market keeps bearish bias for the second week

One-month risk reversal (RR) of USD/TRY, a gauge of calls to puts, braces for a second weekly decline, -0.8000 on a week by the press time of early Friday, per Reuters data.

Talking about the daily RR, the figures turn positive for the first time in the last four days, +0.075 being the latest one.

It’s worth noting that the Central Bank of the Republic of Turkey (CBRT) rate cuts again proved to be ineffective in stopping the USD/TRY bulls as the Turkish lira (TRY) pair refreshed all-time high with a $15.74 level the previous day, down 0.26% intraday around $15.65 at the latest.

Read: Turkey: CBRT cuts policy rate by 100 basis points to 14% as expected

That said, the CBRT Governor Şahap Kavcıoğlu has already signaled a pause to the rate cuts in 2022 and hence the latest hints of a pullback in the USD/TRY prices from the options market should be taken seriously.

On Thursday, Turkish President Recep Tayyip Erdogan announced a hike in the minimum wage by 50% and promised unspecified measures to maintain the US dollar value of wages, as per The Guardian.