• USD/TRY: Still room for significant Lira depreciation in the absence of interventions – Danske Bank

Market news

9 June 2023

USD/TRY: Still room for significant Lira depreciation in the absence of interventions – Danske Bank

The Turkish Lira has weakened significantly this week. Economists at Danske Bank analyze TRY's outlook.

Normalizing policies?

Hopes are building up that Erdogan's newly appointed economic team would soon take steps towards normalizing policies. 

This week's move in the Lira can perhaps be seen as an 'intentional devaluation' as opposed to a full loosening of controls.

In the absence of interventions, we think there is still room for significant Lira depreciation until the central bank credibility is restored and we see interest rate hikes.

 

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