The Turkish lira (-2.4%) has been the worst-performing EM currency over the past week. Economists at MUFG Bank expect the TRY to suffer further losses as energy prices remain high.

Oil price shock to weigh heavily on TRY 

“We still favour further downside for the TRY in the near-term given Turkey’s vulnerability to the negative shock from higher price of oil.”

“We do not expect the CBRT to raise rates in the week ahead in response to building upside risks to already elevated inflation leaving the real policy rate even deeper in negative territory.”