Economists at TD Securities forecast the Lira to depreciate substantially over the course of the last quarter of the year and the start of 2023.

There could be scope for a TRY rally in H2 2023

“TRY will not find support in CBRT's expansive policy (and deeply negative real rates) and the sharply deteriorating current account deficit.”

“The macro trends, global risks and policy missteps are likely to trigger a currency crisis in 22Q4 or 23Q1.”

“We expect USDTRY to leapfrog to 27 or higher before emergency hikes stabilize the lira.”

“With a crucial election by June 2023 and the possible ousting of Erdogan, there could be scope for a TRY rally in H2 2023. This is entirely predicated on Erdogan and the AKP losing the vote and conceding to the opposition.”