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GS Foresee Little Market Reaction to Erdogan Re-Election

TURKEY
  • On the election results, Goldman Sachs write that they think the president is to be sworn in on the 5th June, thereby which completing the election cycle.
  • They see the outcome of the second round as mostly expected and would not expect much of an immediate market reaction.* The focus for markets ahead will continue to be on the TCMB's FX reserves and the TRY.
  • GS add that international reserves have continuously fallen since the beginning of the year and are close to levels when previously TRY volatility sharply increased.
  • While the opposition was expected to opt for more FX flexibility and higher policy rates to contain inflation, the incumbent administration has said that it wants to continue its heterodox policy mix.

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