Turkish Lira after elections: Will it crash, or soar?
- Turkey’s dual elections scheduled for 14 May is not only generating immense political frictions at home, but also spills over to the economy.
- A major for economic agents is whether CBRT’s implicit peg on the exchange rate will be maintained.
- Recently, a slew of reports and analyses concluded that TL is doomed to fall significantly after the elections, no matter which camp emerges victorious.
- Bizarre events can never be ruled out in Turkey, but if the opposition sweeps to victory, there is no sentimental or fundamental reason for TL deprecation.
- In Erdogan and allies win once again, Turkey will say farewell to a free currency market, reverting to “capital controls”.
Sources used in this broadcast
S&P downgrades Turkey’s outlook, updates dollar/TL forecast
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Foreign investors test Turkey’s waters after years in the cold