Analysis: Atilla Yeşilada Gives Green Light to TL Carry Trade

TL DEPOSITORS SET TO WIN: CARRY TRADE REMAINS ATTRACTIVE WITH EXPECTED 31% POLICY RATE AND FIRM LIRA

Financial analyst Atilla Yeşilada asserts in his latest broadcast that the appeal of holding Turkish Lira (TL) remains strong, confirming that the TL carry trade strategy is set to continue its profitability. Highlighting the Turkish Central Bank’s (TCMB) commitment to a tight monetary policy, Yeşilada used his 2026 year-end projections to argue that investors should favor TL assets over foreign currency.

The Core of TL Carry Trade Profitability: Strong Lira and High Real Yield

According to Yeşilada, the profitability of the TL carry trade hinges on a balance between high interest income and low currency depreciation expectations. His analysis suggests this equilibrium strongly favors the Lira:

• Interest Income: Yeşilada projects that while CPI inflation might settle around 25% by the end of 2026, the policy interest rate is expected to be maintained above this level, stabilizing at approximately 31%. This implies a promised real yield of 600 basis points for investors who remain in TL, offering a significant inflation-adjusted premium.
• Low FX Risk: The TCMB is constrained to keep the TL strong to anchor expectations and support the disinflation process. Yeşilada warned, “You will not make money from foreign exchange”. The USD/TRY exchange rate increase is thus expected to be capped at a maximum of 20% next year to avoid fueling inflation.

These projections indicate that the TL interest rate return (currently around 39% gross, or a projected 31% policy rate in late 2026) is substantially higher than the expected currency depreciation (maximum 20%). Consequently, the TL carry trade position (borrowing in a low-yield currency to invest in high-yield TL assets) remains a compelling strategy for global and domestic investors.

Warnings on Equities and FX, Government Bonds Emerge

While promoting TL deposits and funds, Yeşilada issued clear warnings about alternative investment vehicles:

• Stock Market Disappointment: The analyst stated he could no longer defend the Turkish stock market (Borsa Istanbul) and anticipates that the BIST 100’s returns will lag behind deposit rates over the next 3–6 months. He also flagged the risk of ongoing “clean hands” operations targeting financial crime, warning that investigations could spill over into small-cap stocks.
• Focus on Bonds: For investors comfortable with slight risk, Yeşilada recommended 2- to 5-year local government bonds. Given the expected drop in inflation and the strong Lira policy, these bonds are poised to offer not only interest payments but also potential capital gains.