Economists at Credit Suisse see scope for still sizable volatility in USD/TRY in the weeks ahead as the government continues to tackle lira weakness via unconventional policies. At current levels of around 13.40, they see mainly upside risk to USD/TRY.

Unconventional policies

“There is scope for still sizable moves in USD/TRY in the weeks ahead as the government experiments with unconventional measures. The fact that USD/TRY implied volatility remains at multi-year highs is justifiable.”

“We cannot forecast levels for USD/TRY with a high degree of confidence at this point but at current levels of around 13.40, we think USD/TRY risk remains weighted towards the upside.”