The Central Bank of the Republic of Turkey (CBRT) Monetary Policy Committee (MPC) increased the policy rate by 500 basis points, raising it from 25% to 30%, in line with expectations. Although the increase in the value of Bitcoin against the Turkish lira is showing signs of gaining momentum again, this momentum is being curbed by the decline against the US dollar.
The Fourth Interest Rate Hike During Erkan’s Presidency
Under the presidency of Hafize Gaye Erkan, the CBRT raised the policy rate for the fourth time, increasing it by 500 basis points from 25% to 30%. Market expectations were that the CBRT would raise the policy rate to 30%. As expected, there was no surprise decision for the markets. Following the decision, the USD/TRY exchange rate, which started the day at 26.98, reached 27.17, while the EUR/TRY exchange rate, which started at 28.91, reached 28.84.
During Erkan’s presidency, the first interest rate hike was expected to raise the policy rate to 21% at the June MPC meeting, but it was announced as 15%, lower than expectations. Following the policy rate decision that fell below expectations, the USD/TRY and EUR/TRY exchange rates broke record after record. In the July MPC meeting, the policy rate was increased by 250 basis points to 17.50%, again lower than expectations, while in the August meeting, the policy rate was increased above expectations from 17.50% to 25%.
Bitcoin’s Current Situation After the Interest Rate Decision
With the latest data, Bitcoin is at 723,056 Turkish liras, with a 0.90% decrease against the Turkish lira in the last 24 hours. The data shows that the largest cryptocurrency has increased its value against the Turkish lira by 1.13% in the last 7 days and by 3.16% in the last 30 days. Furthermore, the rate of increase in value since the beginning of the year is 63%.
Altcoins, which have been severely affected against the US dollar, do not seem to be affected much against the Turkish lira. The largest altcoin, Ethereum (ETH), is at 43,275 Turkish liras with a 1.55% decrease in the last 24 hours. ETH, which reached its all-time high against the Turkish lira at 132,115 on November 16, 2021, is trading below its record price by 66.57% at current prices.
