French bank Société Générale (SocGen) made a new analysis on Turkey.
Société Générale (SocGen) suggested a long position in USD/TL while predicting that the peak of inflation would be 87 percent in its analysis on Turkey.
While the bank kept its year-end forecast of USD/TL, which was previously announced as 22, it recommended a long position in USD/TL.
SocGen CEEMEA Chief Strategist Marek Drimal emphasized that the Central Bank of the Republic of Turkey (CBRT) did not expect a change in its communication in the interest rate at its August meeting.
Drimal said in his note dated August 16, “We expect the official annual inflation data of Turkstat to peak at 87 percent in October.”
“Although inflation is expected to gain further momentum, interest rate hikes remain unlikely,” the note said, adding that the Central Bank is expected to continue focusing on other measures to curb credit growth, deter foreign currency positions, and support the lira.
Stating that the baseline scenarios for the CBRT are to continue the current policy at least until the election scheduled for June 18 next year, Drimal said, “In our opinion, solid tourist revenues will probably ease the pressures on the lira in the third quarter of 2022, while measures to control credit growth and The rising reserves of the CBRT will also prevent the lira from experiencing an uncontrolled depreciation during the winter months.
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