USD/TRY: Turkish lira looks set to remain volatile – Credit Suisse
|Analysts at Credit Suisse continue to have a bearish view of the Turkish lira. They anticipate that the exchange rate will remain volatile with the government experimenting with unconventional policies.
Key Quotes:
“The lira looks set to remain volatile as the government experiments with unconventional policies (e.g. FX-linked TRY deposits) while real rates have fallen far into negative territory.”
“Another phase of abnormal volatility, similar to the one in mid-December, cannot be ruled out.”
“Meanwhile, the risk of an early elections announcement in Q1 2022 seems low. But if it materialises anyway, it will probably pave the way for some respite for the lira.”
“The vulnerability of the lira is likely to lead markets to build up further risk-premium in front-end rates. We see scope for 1-year OIS rates to rise above their November high of 27.30% and possibly reach 30.00% later in Q1.”
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.