USD/TRY: Risks remain heavily tilted to the downside for the lira – MUFG

The Turkish lira has remained relatively more stable against the US dollar for most of September. Despite recent stability, the trend remains in favour of a faster sell-off resuming, in the opinion of economists at MUFG Bank.

Lira’s recent resilience unlikely to last

“We do not expect the lira’s recent resilience to last. Turkey’s weak economic fundamentals still favour further lira weakness.”

“The widening current account deficit, elevated inflation, and negative real policy rate remain a recipe for further lira weakness.” 

See: USD/TRY will continue to rise gradually for now, breaking above 19 – Credit Suisse