The Central Bank of the Republic of Turkey (CBRT), the Monetary Policy Committee (MPC), raised the policy rate by 250 basis points from 15% to 17.50%. Expectations were for the CBRT to raise the policy rate to 20%. Following the interest rate decision, the value of Bitcoin against the Turkish lira rapidly reached a record high.
TCMB increased the policy rate for the second time during Hafize Gaye Erkan’s presidency, raising it by 250 basis points from 15% to 17.50%. As a result, the USD/TRY exchange rate, which started the day at 26.86, rose to 26.94, and the EUR/TRY exchange rate, which started the day at 29.94, rose to 30.22.
Second Interest Rate Hike During Hafize Gaye Erkan’s Presidency
Most of the economists participating in the expectation survey conducted by Anadolu Agency predicted that the CBRT would raise the policy rate to 20%. The Market Participants Survey conducted by the CBRT also yielded similar results.
During Erkan’s presidency, the first interest rate hike took place in the June MPC meeting. Although an increase to 21% was expected, the policy rate was announced as 15%, falling below expectations. As a result, the USD/TRY and EUR/TRY exchange rates broke record after record.
Bitcoin’s Value Against the Turkish Lira Soars
The value of Bitcoin against the Turkish lira is rapidly reaching record highs due to the upward movement of the largest cryptocurrency against the US dollar, crossing the 30,000 level, and the increase in the policy rate by the CBRT below expectations, which affected the USD/TRY exchange rate.
Following the decision, the BTC/TRY exchange rate, which started the day at 815,400 and reached 826,428 liras before the interest rate decision, recorded a record of 852,499 on the Binance exchange on December 20, 2021. For Bitcoin’s value to renew its record against the Turkish lira, it needs to surpass this level. Market analysts and observers emphasize that the CBRT’s below-expectation interest rate hikes and Bitcoin’s momentum above 30,000 dollars will soon lead to a new record for the BTC/TRY exchange rate.
