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The USD/TRY exchange rate remained in a consolidation phase ahead of the final Central Bank of the Republic of Turkey (CBRT) decision of the year. The pair was trading at 29 on Thursday, much higher than its 2023 low of 18. It has jumped in most months in the past decade, pushing the Turkish lira into uncharted zones.CBRT decision aheadThe USD to TRY exchange rate has been in a bull run for decades. In all, the pair has soared from just 1.1 in 2008 to almost 30 today. This crash happened as the president, Recep Erdogan, radically changed the CBRT and made it less independent.The lack of independence has led to a lack of confidence in the central bank and the Turkish lira. This explains why the currency has reacted mildly to its dramatic rate hikes this year. Since June, the bank has delivered a series of giant rate hikes in a bid to boost the currency.Rates rose from about 18.5% to 40% in one of the most sharpest increases in years. In theory, such rate hikes should lead to more lira strength by encouraging people and investors to hold the currency. Besides, the US dollar is yielding less than 5%. Instead of boosting the Turkish lira, the recent rate hikes have helped to slow its collapse. Indeed, the USD/TRY has remained in an extremely tight range in the past few months.The next important catalyst for the USD/TRY pair will be the final rate decision of the year. Economists believe that the bank will deliver another giant rate hike, which will push interest rates from 40% to 42.5%. The bank will also point to more increases in 2024 in a bid to boost the lira.USD/TRY forecastUSDTRY chart by TradingViewFundamentally, the Turkish lira should continue falling in 2024 since Erdogan will remain in power. While these rate hikes are necessary, investors don’t have confidence that Erdogan will support these rates for long. The other risk is that the Turkish economy is not doing well. The most recent data revealed that the economy grew by 5.9% in the third quarter even as consumer spending slowed. A combination of higher interest rates, weak global growth, and falling industrial production could hit the economy.However, there is also a likelihood that the lira could have a short-term rally during the year as investors embrace a risk-on sentiment. We have already seen this sentiment recently as US equities have surged to a record high and the US dollar index (DXY) and VIX have plunged. In my base case, I suspect that the USD/TRY pair will average at 30 in the first part of the year. A temporary drop to about 25 is also possible as the risk-on sentiment prevails.More By This Author:Southwest Airlines Pilots May Get A 50% Pay Raise Micron Q1 Earnings: ‘Big Driver In 2024 Is Going To Be AI’ Apple Will Be Worth $4.0 Trillion By The End Of 2024: Wedbush Analyst