Recently, the head of the central bank resigned and was once again replaced by deputy Fatih Karahan. The new chief has experience working at the US Fed, and like his predecessors, promises to maintain tight monetary policy until inflation has declined fully towards the 5% target. The change In the end, however, only one thing will rule: President Tayyip Erdogan’s will. 

Markets are aware that the CBT governor’s promise counts for little until and unless Erdogan actually supports the policy. 

We retain our ‘symbolic forecast’ of 35.00 for USD/TRY by the end of 2024. Symbolic because the fair value is unknown (even to CBT, in our view) and many abrupt qualitative changes can occur before then.