From time to time, we take a detour and look at the Turkish Lira. We will take another detour today as USD/TRY is closing in on a possible temporary resistance near 20.93. The economic situation in Turkey is not favorable for the TYR. Inflation is high, but the interest rates are kept artificially low by the government, which keeps adding fuel to the fire. The risk of runaway inflation and massive pressure on the TRY is clearly present. If the government loses that little control they still may have on the TRY, then resistance at 20.93 will be overcome without any trouble and a continuation higher towards 27 and 31 is next, with the risk of hyperinflation lurking around the corner.
