May see the end of the year 28 level

With the elimination of election uncertainty, the markets focused on the new economy management and the policies to be followed. Experts are of the opinion that depending on the news flow in this direction, the activity in the market may increase.

According to Morgan Stanley analysts, including Hande Küçük and Alina Slyusarchuk, quoted by Bloomberg, they wrote in a note on Sunday that the lira could reach 26 per dollar earlier than expected and weaken close to 28 by the end of the year without a change in policy direction. The currency closed close to a record low of 19.97 per dollar on Friday before the elections.

Analysts wrote, “Unless a change is made in the macro policy framework that will prioritize disinflation and adopt market-friendly policies, Turkey’s high external financing needs will keep macro risks alive and increase sensitivity to global shocks (commodity prices, Fed) and the presence of foreign exchange inflows from regional partners.” .


Timothy Ash of BlueBay Asset Management, quoted by Reuters, said: “Unless we see a 180-degree turn in monetary policy and we see a reliable leadership team assigned to the economy, the situation in TL may get ugly.”

In order to limit the depreciation of TL, the CBRT lost 9 billion dollars in reserves in the week before the first round of the elections, while the loss of reserves in the first week between the two elections was 3.5 billion dollars. Bankers calculate that reserve losses continued last week.

Reserve adequacy is the most important source of concern in the markets and the source of the criticism that the economic policies of the markets are not sustainable in the long run. As of the week of May 19, net international reserves fell to negative for the first time since 2002.


Between the two rounds of the election, the credit market had come to a standstill, as the bankers called it, except for exceptional and compulsory situations.

While there was an annual return of around 40 percent in deposit interests in high-volume transactions, these rates began to spread towards lower amounts in some banks. Bankers stated that they could not do “not much” during the election period, except for KKM and deposits.

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