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Gauging Lira Sentiment

TURKEY

Reflecting heightened uncertainty around the near-term lira outlook, USDTRY 3M ATM IV now trades north of 30% (last @ 33.23), returning to levels not seen since early 2019.

  • On the macro side it will be worth keeping an eye on time and sight deposits in foreign currency to proxy local sentiment towards the currency. Currently 70% of sight deposits and 43% of time deposits are held in foreign currency.
  • Weekly gross FX reserves stood at USD52.664bn at of March 12. World Bank data indicate USD117.4bn of short-term foreign currency debt and USD297.1bn of long-term FCY debt.

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