American bank shares its forecast! How much will the dollar be at year-end?

US banking giant Bank of America Securities has published a report titled "First quarter pessimism out, summer optimism", released by BofA economists and strategists, including Zümrüt İmamoğlu, following their visit to Turkey. 

While noting that both domestic and foreign investors have become more optimistic with the tightening of monetary policy in Turkey, the report states that the real sector is seeing a significant slowdown in the economy, and banks are seeing a reversal from the dollar, using the phrase, "The private sector is now feeling the slowdown in the economy and is of the opinion that the monetary stance is sufficiently tight." 

BofA stated that positioning in the Turkish Lira and Turkish Lira-denominated bonds is widespread, and that crowded positioning in the TL and inertia in inflation are seen as the most important sources of concern.

"Since the local elections, domestic foreign exchange demand has reversed, and in our meetings with banks, they said they saw both individual investors and corporate companies on the selling side," the report said, adding the assessment: "If the TL stabilizes, the trend of de-dollarization may continue throughout the summer months. Given the high level of inflation, we expect some nominal depreciation in the TL when capital inflows slow down."

BofA expects the Dollar/TL to be at the 38 level by the end of the year.