There is no real protection against the next big move in USD/TRY – Commerzbank
|The Turkish lira has regained some footing after veering dangerously close to the 18.00 mark versus the US dollar. Economists at Commerzbank believe that there is no real protection against the next big move in the USD/TRY pair.
Efforts to attract foreign capital have had little impact
“The seasonally-adjusted current-account deficit narrowed slightly month-on-month (although it is still recording a wide $3.3bn deficit in absolute terms). What is more significant for the exchange rate is the continued net outflow on portfolio as well as banking sector sides.”
“Efforts to attract foreign capital by promising FX-protected instruments or opening up the local bond market further have had little impact. And this very likely reflects a lack of policy credibility and central bank credibility at the broader level among investors. Which in turn means that there is no real protection against the next big move in USD/TRY.”
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