The change in calendar year has brought no respite for the Turkish Lira (TRY). Economists at Société Générale analyze TRY outlook.
Lira’s fortunes likely to turn in 2Q24 after the local elections
We believe the Lira’s fortunes are likely to turn in 2Q24 after the local elections (due 31 March) based on improvement in Turkey’s current account due to seasonality and expectations of broad Dollar weakness.
Additionally, we expect local markets to attract a new wave of inflows starting 2Q24, resulting in the Lira recovering during the summer and a substantial total return given the high policy rate of 45%.
Our house call is for USD/TRY to top out around 32.00 in 1H and drop towards 30.00 later this year.
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