Year-end dollar forecast from major bank: Exchange rate could hit 47 TL

In its June foreign exchange report, ING Global made significant assessments regarding Turkey's economic outlook. The bank shared its expectations for the future values of the dollar and the Euro against the Turkish lira.

ING expects the dollar/TL exchange rate to reach 40.15, 41.20, 43.00, and 47.00 over the next 1, 3, 6, and 12-month periods, respectively. For the Euro/TL, the projected levels for the same periods are 45.77, 46.97, 49.45, and 54.05. These forecasts indicate that the Turkish lira will continue its gradual trend of depreciation.

The report stated that inflation in Turkey decreased on an annual basis in May due to a strong base effect and a decline in price pressures. However, it warned that rising oil prices, should the Iran-Israel tension escalate, could negatively impact this process. Inflation is expected to remain below 30 percent by the end of the year.

THE TURKISH LIRA CONTINUES TO DEPRECIATE

It was noted that the Central Bank of the Republic of Turkey (TCMB) has increased its reserve accumulation, with the latest figure reaching 29.8 billion dollars. The transfer of a portion of the banking sector's foreign exchange liquidity to the TCMB balance sheet through reserve requirement increases contributed to this process. However, it was also emphasized that geopolitical risks could make further reserve growth difficult.

The depreciation of the Turkish lira continued in May. ING stated that the TCMB has begun to loosen liquidity conditions as inflation declines and interest in TL-denominated assets increases. However, no significant change in direction is expected for the Turkish lira under current conditions.

News Source: 12punto