USD/TRY: Lira to face enormous underlying depreciation potential – Commerzbank

The economic difficulties in Turkey are very clearly felt and increasingly painful. Economists at Commerzbank believe that the Turkish lira is set to come under further pressure in the weeks ahead.

The difficulties are intensifying

“The central bank’s last rate hike in mid-March illustrated once again: interest rates and monetary policy are unlikely to change any time soon, but inflation will continue to rise and with it the economic and in the end also the fiscal difficulties.”

“There is still enormous underlying depreciation potential for the lira. The only question is when and why (what is going to be the catalyst?) this potential will be realised.”