USD/TRY has broken multiple record highs for the past 24 months. In the view of economists at TD Securities, another currency crisis is in the making.

Turkey's macrofinancial conditions hang in a fragile and unsustainable balance

“The last currency crisis dates back to Dec 2021, but — we believe — a new one is in the making and can push the pair to 27.00 by December 2022.”

“Turkey's macrofinancial conditions hang in a fragile and, eventually, unsustainable balance.”

“The CBRT continues to provide indirect lira support through derivatives transactions that have swelled to USD65 bn in August, USD30 bn of which are maturing within one month. For these reasons, we think that another currency crisis is coming, though, obviously, its exact timing is difficult to call.”