28 Apr 2015
Outlook for the Turkish lira remains neutral – JP Morgan
FXStreet (Edinburgh) - The near term perspective for the Turkish currency remains neutral, suggested analysts at JP Morgan.
Key Quotes
“The underperformance of the lira continued this past week, triggered by the lack of response by the CBRT in their policy meeting to defend the currency (all rates were left unchanged)”.
“Election risks also continued to weigh on the currency, with the market demanding additional risk premia in the scenario that the AKP party wins enough of a majority in June to change the constitution”.
“We continue to remain neutral on TRY FX in the short run (further adjustment is needed in the medium run)”.
“We think that further depreciation from current levels of USD/TRY may trigger a policy response from the CBRT as the priority of Turkish politicians shifts away from demanding rates cuts more towards defending the currency given the balance sheet effects of a higher USD/TRY on corporate USD liabilities”.
Key Quotes
“The underperformance of the lira continued this past week, triggered by the lack of response by the CBRT in their policy meeting to defend the currency (all rates were left unchanged)”.
“Election risks also continued to weigh on the currency, with the market demanding additional risk premia in the scenario that the AKP party wins enough of a majority in June to change the constitution”.
“We continue to remain neutral on TRY FX in the short run (further adjustment is needed in the medium run)”.
“We think that further depreciation from current levels of USD/TRY may trigger a policy response from the CBRT as the priority of Turkish politicians shifts away from demanding rates cuts more towards defending the currency given the balance sheet effects of a higher USD/TRY on corporate USD liabilities”.