Pressure on the Turkish lira is set to persist for now. Nevertheless, economists at Credit Suisse are not convinced that buying USD/TRY at current levels necessarily offers a favourable risk-reward trade-off for short-term trading purposes.

Scope for USD/TRY to rally towards its next “rounded level” of 17.00

“Persisting demand for dollars is likely to push USD/TRY higher to the next ‘rounded’ level of 17.00 in the short run. However, introductions of new policies/instruments by the government aiming to curb dollar demand by locals seem on the cards. 

“Although the lira remains vulnerable we do not necessarily see favourable risk-reward trade-off for buying USD/TRY at current levels for short-term trading purposes.”