FXStreet reports that analysts at Goldman Sachs see more pain for Turkish lira, which fell to a record low of 7.3558 per US dollar on Friday and has depreciated by nearly 23% this year. 

“Over the short run, risks to USD/TRY are skewed to the upside, given rising foreign currency deposits locally and a backdrop that features a deteriorating inflation outlook, limited reserves, an external financing gap and an unconventional policy mix that is running up against binding constraints,” Goldman’s Zach Pandl noted in a report, according to Bloomberg. 

The investment bank has raised USD/TRY forecasts to 7.75, 8, and 8.25 in three, six, and 12 months, respectively, from the previous projection of 7, 7.50, and 8.

“Amid August illiquidity, a discontinuous move in the lira would still reverberate across EM HY markets as investors would likely worry about ‘the next domino to fall’ as a result of the COVID crisis”