USD/TRY to advance nicely towards 9.15 by year-end – TDS
|The CBRT unexpectedly cut the repo rate by 100bps to 18%. The lira will absorb most of the damage. Economists at TD Securities still forecast USD/TRY at 8.85 by end-Q3 and 9.15 by end-2021.
TRY weakness is unlikely to manifest in an uncontrolled fashion
“The MPC decided to cut the repo rate by 100bps to 18.00% when the almost unanimous consensus (including us) looked for a hold.”
“The will weaken a little more and a little faster than many had expected, but it shouldn't be an explosive reaction. USD/TRY is now rapidly aligning towards our end-Q3 forecast of 8.85.”
“We think it will be a steady move towards and beyond the 9 mark, consistently with our long-held forecasts (9.15 by year-end and 9.75 in Q1 2022).
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