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Commerzbank Revises Year-End USD/TRY Target to 8.50 vs 8.00 Prior

TURKEY

CommerzBank:

  • While recent bout of lira weakness is due to global selloff, Turkey's own inflation dynamics continue to deteriorate
  • New CBRT chief is seen raising rates further to break the feedback from weak currency to higher inflation, but that move is seen risking a reaction from President Recep Tayyip Erdogan
  • "who might claim that such repeated developments confirm that rate hikes do not work"
  • Commerz expects a 100bps rate hike on March 18
  • Investors' confidence in lira relies on their assumption that CBRT Governor Naci Agbal will do what inflation trends require
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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