Lira exposed to downside risks as external balance ‘flashing red’ – Goldman Sachs
|In the latest client note, Goldman Sachs Analysts including Mark Ozerov noted that they do not expect the stability seen in the Turkish Lira in the recent times.
Goldman Sachs cited that the country’s interest rates remain too low to rein in the economy’s widening current-account deficit and tame inflation. But with authorities not keen on the weaker growth that would accompany rate hikes, it would take “a degree of market pressure on the currency” for the central bank to move, Bloomberg reports.
Ozerov noted: “Turkey continues to show the classic signs of an overheating economy, with double-digit inflation and a worsening external balance.”
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