Goldman Sachs releases TL forecast for 2024

In the bank's report titled "10 CEEMEA questions for 2024," the answer to the question "Will the Turkish Lira depreciate less than expected?" was given as "yes."

The report stated that monetary and financial conditions have tightened significantly since September, which has helped moderate domestic demand and slow down consecutive price pressures.

The report noted that foreign currency inflows have begun to trend upward as real interest rates have returned to positive territory.

The report indicated that the TCMB has signaled comfort with at least some real appreciation of the TL, and taking this into account, it was stated that increasing foreign currency inflows and a narrowing current account deficit would keep the rate of depreciation of the TL within limits in 2024.

PREDICTIONS MADE

The report noted that the rebalancing of demand has also improved Turkey's external balances, forecasting that the current account deficit-to-GDP ratio, which was 4.1 percent in 2023, will decline to 1.8 percent in 2024.

The report stated that it is more likely that the TCMB will focus on restructuring its balance sheet rather than allowing the TL to strengthen in nominal terms, adding, "We believe it is likely that the TCMB's net reserves, covering both legs of bilateral and bank swaps, will turn positive in 2024 from the current negative 49 billion dollars."

While the dollar exchange rate stands at 29.85 TL as of today, the forward rate in the futures market is priced at 32.50 for the end of March, 35.70 for the end of June, and 41.70 for the end of December.

News Source: AA