10 Mar 2015
Turkish lira looks to stabilize in the medium term – Danske Bank
FXStreet (Edinburgh) - Analysts at Danske Bank expect the Turkish currency to stabilize in a 6/12-month horizon.
Key Quotes
“The bank cut its 1-week deposit rate on USD-deposits to 4.5% from 7.5% and to 2.5% from 6.5% on EUR-deposits. The TCMB cited the global downtrend in rates as the reason. However, it is obvious that the timing of cuts has to be viewed in the light of the recent significant sell-off in the Turkish lira”.
“However, we are critical about the possibility for any recovery in the lira in the near term as the lira is facing significant short-term headwinds”.
“On the positive side we would like to highlight the fact that the relatively low level of the oil price is very helpful for Turkey’s external position and we do expect a further improvement in the Turkish current account situation in the coming years”.
“This combined with the fact that the lira has sold off significantly renders the lira more attractive from a more fundamental perspective, which in the medium term (six to 12 months) should help stabilise the currency.
Key Quotes
“The bank cut its 1-week deposit rate on USD-deposits to 4.5% from 7.5% and to 2.5% from 6.5% on EUR-deposits. The TCMB cited the global downtrend in rates as the reason. However, it is obvious that the timing of cuts has to be viewed in the light of the recent significant sell-off in the Turkish lira”.
“However, we are critical about the possibility for any recovery in the lira in the near term as the lira is facing significant short-term headwinds”.
“On the positive side we would like to highlight the fact that the relatively low level of the oil price is very helpful for Turkey’s external position and we do expect a further improvement in the Turkish current account situation in the coming years”.
“This combined with the fact that the lira has sold off significantly renders the lira more attractive from a more fundamental perspective, which in the medium term (six to 12 months) should help stabilise the currency.