USD/TRY: Inappropriate policy continues to pose downside risks for the lira – MUFG
|During August, the Turkish lira weakened against the US dollar from 17.92 to 18.18. In the view of economists at MUFG Bank, risks remain heavily tilted to the downside for the TRY.
Turkey’s weak economic fundamentals still favour further lira weakness
“Turkey’s economy appears to be overheating with domestic demand still robust, the trade balance widening sharply and very elevated inflation.”
“The CBRT’s decision to lower rates will further undermine confidence in domestic policy settings and in the lira.”
“The policy rate in Turkey now appears even more inappropriate. After adjusting for inflation of 79.6% in July, the real policy rate has fallen even deeper into negative territory. It should keep downward pressure on the lira.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.