Turkey’s lira (TRY), which has taken a beating this year, now looks undervalued, according to the Institute of International Finance’s (IIF) chief economist Robin Brooks.
“Lira is now 6% weaker than our $/TRY 7.50 fair value, and it’s only for a 10-15% deviation that our models would signal significant undervaluation,” Brooks tweeted.
However, according to Brooks, the lira may still struggle to stabilize, as credit growth is still too high.
The TRY is currently trading near the record low of 7.9574 reached earlier this week. The currency has depreciated by 33% this year alone.
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