Goldman Sachs updates dollar/TL forecast: 12-month expectation rises to 59

Analysts at the US investment bank Goldman Sachs have adjusted their exchange rate forecasts after evaluating the recent monthly depreciation momentum of the Turkish Lira. According to a note published by an analyst team including Kamakshya Trivedi, the institution's 3-month dollar/TL forecast was raised from 48 to 51, and its 6-month forecast from 50 to 53. The 12-month expectation, previously announced as 54, has been updated to 59.

The analysts emphasized that unless scenarios such as a significant drop in energy prices, a sharp rise in gold prices, or a global depreciation of the dollar occur, risks point to a faster depreciation of the Turkish Lira. The Goldman Sachs report stated that the gradual increase in pressures on the external balance and potential volatility stemming from elections were influential in this projection. Despite all these risks, it was noted that the current exchange rate regime is expected to continue even if the depreciation accelerates.

LONG POSITION RECOMMENDATION MAINTAINED

On the other hand, Goldman Sachs decided to maintain its long position recommendation for an equally weighted basket consisting of the Turkish Lira, the Nigerian Naira, and the Kazakhstani Tenge against the dollar. To continue benefiting from the high-yield (carry trade) opportunity, the institution raised the target return rate for this trade from 7.5 percent to 10 percent, while also increasing the stop-loss level from 1.5 percent to 4 percent.

News Source: 12punto