Japan-based MUFG Bank has released its analyzes about the rapidly depreciating TL after the new economy cabinet took over the economy management. Among the analyzes of the bank, there are critical predictions for the future regarding the dollar/TL parity.
It Is Important That The New Management Gain The Confidence Of Foreign Investors
Under the leadership of Mehmet Şimşek and Hafize Gaye Erkan, MUFG analysts stated that it is important for the Turkish economy, which is trying to open a white page for itself, to gain confidence in the eyes of foreign investors, and that it is important for the ‘rational’ CBRT, which has returned to the interest rate hike path, to gain the trust of foreign investors, especially. Emphasizing that President Erdoğan’s view of lowering interest rates is still the same and that the concerns that the policy of increasing interest rates may be short-term are very common, especially among foreign investors, MUFG wrote that it will be painful and take time to regain investor confidence.
Given that President Erdogan has long been a proponent of lower interest rates, it will take time to regain investor confidence amid fears that the policy reversal may be short-lived.
MUFG Bank Analysts
Underlining that the 650 basis point increase decision taken at the first interest rate meeting under the management of CBRT President Erkan was insufficient and that this decision put pressure on the TL, analysts stated that they expect interest rates in July and August to approach inflation, which was measured as 39 percent in May.
The ceiling is 30 in USD TL!
Analysts’ forecasts for the dollar/TL point to a gradual depreciation, not a free fall. In the published report, the bank’s 2023 3rd quarter forecast for USD/TL is 28, and the 4th quarter forecast is 29.
However, analysts explaining their perspectives for 2024 said that in the first quarter of 2024, the dollar/TL parity will reach the level of 30 and they expect it to complete the first half of the year in that region.
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