The Turkish Lira (TRY) has continued to weaken even after the central bank has hiked rates massively since June 2023. Economists at Commerzbank analyze TRY outlook.
The recent change of central bank governor does not foster market confidence or continuity
Recently, the head of the central bank resigned and was once again replaced by deputy Fatih Karahan. The new chief has experience working at the US Fed, and like his predecessors, promises to maintain tight monetary policy until inflation has declined fully towards the 5% target. The change In the end, however, only one thing will rule: President Tayyip Erdogan’s will.
Markets are aware that the CBT governor’s promise counts for little until and unless Erdogan actually supports the policy.
We retain our ‘symbolic forecast’ of 35.00 for USD/TRY by the end of 2024. Symbolic because the fair value is unknown (even to CBT, in our view) and many abrupt qualitative changes can occur before then.
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
Hot
No comment on record. Start new comment.