Analysts at Rabobank suggest that Turkey continues to be one of the main stories as the Turkish lira is the best performing EM currency so far this month rallying more than 6% and trimming significant year-to-date losses to 38% against the US dollar.
Key Quotes
“A story published by the Wall Street Journal boosted market optimism that tense relations between the US and Turkey may ease.”
“An attempt to improve relations with the US is the third important component required in order to expect the lira to recover in a sustainable way. The other two crucial elements are already in place (at least partially in case of economy policies) as the central bank delivered a decisive rate hike of 625bps to 24% on September 13, which was followed by a new economic program revealed by Treasury and Finance Minister Albayrak, who pledged to rebalance the economy, tighten fiscal policy and transform manufacturing and exports to address the chronic issue of persistently high inflation and wide C/A deficit financed mainly by volatile capital flows.”
Share
