Senior Strategist at Danske Bank Vladimir Miklashevsky gives his views on the Turkish Lira.
Key Quotes
“The USD/TRY hit another all-time high yesterday, posting 4.50 as Recep Tayyip ErdoÄŸan was meeting Turkish central bank’s (the TCMB) governor. Markets became even more confused following ErdoÄŸan’s interview to Bloomberg on Tuesday, as he stated that he plans to take more responsibility for monetary policy after the election next month”.
“Yet, the TRY rate is one of the key factors for voters during the snap election on 24 June. Thus, ErdoÄŸan is facing a clear dilemma. To stop TRY’s devaluation, the central bank needs a significant, credible hike of more than 150bp. That could mean an emergency hike before the June decision. While we have stayed TRY bearish on weak Turkish macro, the current TRY levels show the lira has been oversold”.
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