Volatility expected to grow around TRY – Danske Bank
|Jens Sorensen, Chief Analyst at Danske Bank, noted the Turkish currency remains under pressure.
Key Quotes
“The Turkish lira strengthened significantly yesterday after Mehmet Simsek, the Deputy Prime Minister, flagged that the central bank would take action soon as it has done in the past”.
“Furthermore, there were indications that the central bank has been tightening lira liquidity through its repo window. We are sceptical that the central bank would be in a position to react in a forceful way (by raising its benchmark rate by 300bp for example) and continue to see upside risk to our current USD/TRY forecast of 3.60 by mid-March and 3.95 in 12M”.
“However, the signals from Simsek could point to central bank action ahead, which could send the USD/TRY lower towards our forecast path”.
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