Whose side are you on?

Finally, a nightmare of a trading week comes to an end.

Yesterday, while USD/TRY was testing above 4,15, it suddenly started to drop upon CBRT’s “We may hikes rates” implication It even pushed below 4,10.

In the evening, however, changing direction with a last minute “not that much” manoeuvre, it climbed up back above 4,10. Naturally, I was bombarded with questions. My answer was, “It may fluctuate in a broad band of 4,05-4,20 until April, if it doesn’t, we should watch out for a band between 4,10-4,25. Although some insist on making spot-on predictions through technical analysis, I, on the other hand, find it not very smart to make a technical analysis on levels that have not been tested before. Therefore, we should keep our estimates within an acceptable range.

“Instead of talking about the worst-case scenario, why don’t we prevent it from happening?”

Some are asking, “What happens if USD/TRY moves further above?” In response, I usually tell them a joke. People ask to the hunter:

  • There’s a wild boar coming onto your way. And your shotgun is jammed. What do you do?
  • I’d climb a tree.
  • There’s no tree around!
  • I’d hide behind a rock
  • There’s no rock around!
  • Then, I’d hide behind the bushes
  • There’s no bush either!

Having had enough of this, the hunter finally explodes and says:

  • Wait a minute! Whose side are you on? Mine or the boar’s?

Talking and talking about a worst-case scenario, which has never been tested before, won’t take us anywhere! The important thing is to take every precaution possible against potential problems and carry on.

Integration between Monetary and Financial Policies may help us prevent such risks. I offered my propositions to the competent authorities. Let’s hope for the best.