USD/TRY: The pace of Lira depreciation will slow in the year ahead – MUFG

The Turkish Lira (TRY) has continued to weaken at the start of this year at a similar pace to the end of last year by an annualized rate of around -28% against the US Dollar (USD) between January and February. Economists at MUFG Bank analyze Lira’s outlook. 

Upcoming local election results unlikely to alter Erdogan’s tolerance for higher rates

The pace of Lira depreciation will slow in the year ahead based on the assumption that the CBRT sticks to tighter policy. 

Economic growth has started to slow in response to higher rates. We are not expecting the upcoming local election results in March to alter President Erdogan’s tolerance for higher rates.