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HSBC Sees USD/TRY At 7.10 By End-2021

TURKEY

HSBC's view on USD/TRY moves to 7.10 by end-2021 from 7.70 prior (via Bloomberg)

  • Changes in financial leadership and shift toward more conventional policy approach improved Turkish lira's outlook
  • Currency deeply undervalued and foreign positioning very low
  • "Full normalisation" would imply bigger move towards 6.50- Lira will continue to face high inflation in 2021, but central bank can now offer sustained positive real interest rate buffer
  • Some of 2020's large portfolio outflows may reverse with more predictable monetary policy
  • Foreign bond holdings are low and have room to recover
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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