The Central Bank of the Republic of Turkey (TCMB) is set to announce its interest rate decision on Thursday, and ahead of this, Bank of America Global Research (BofA) stated that the tight monetary policy and support for the new economic program in Turkey have enabled both domestic and foreign investors to be more positive.
Stating that the private sector in Turkey now feels a slowdown in the economy and believes that monetary policy is sufficiently tight, BofA noted that if fiscal measures are effective, the budget deficit could be reduced to below 5 percent.
PRESSURE CONTINUES
The bank stated that speculative domestic flows toward foreign currency have reversed, but that domestic and foreign flows continue to exert pressure on the exchange rate despite a net position of 49 billion dollars.
In its assessment, the bank pointed out that crowded positioning in the Turkish Lira and the situation regarding inflation are the biggest sources of concern, noting that they expect a more positive atmosphere as data continues to improve.
News Source: 12punto
