The Turkish lira fell from 8.5607 to 8.6933 versus the US dollar in June. The lower lira trend is expected to continue, according to MUFG Bank experts.
“It would still be premature for the CBRT to start cutting rates, and it would be much riskier now that the Fed has taken a more hawkish attitude.”
“The CBRT also attempted to restore investor confidence in the lira by saying that it is in talks with four other nations to negotiate currency swap agreements, with two of them close to a deal. While the specifics of the other prospective currency swap arrangements have yet to be revealed, we doubt they will materially alleviate investor concerns over Turkey’s lack of foreign exchange reserves.”
“The lira’s risks remain tilted to the downside, with deterioration likely to accelerate when the CBRT lowers rates later this year.”/n
