USD/TRY: To drop to 5.00 before turning to the upside - Rabobank
|According to Rabobank analysts forecast, the USD/TRY pair at 5.00 in 3M, at 5.20 in 6M and 5.60 in 12M.
Key Quotes:
“A sharp deceleration in inflation to 21.62% y/y in November triggered market speculation that the CBRT could seriously consider an early interest rate cut to ease pressure on the economy, which contracted 1.1% q/q in Q3. It is absolutely crucial that the central bank strongly reiterates its commitment to maintain tight conditions given that the policy rate at 24% is a major source of support for the lira.”
“An early rate cut would be counterproductive and could seriously undermine the fragile lira’s stability, as reflected in the recent squeeze higher in USD/TRY.”
“Significant progress on implementing structural reform is required to expect a sustainable lira recovery.”
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