The Turkish lira strengthened to below 32.4 per USD from a record low of 32.6, as major banks see improved risk-reward on long lira following March's interest rate hike. Market analysts consider that the current account improvements coupled with the monetary policy tightening and the upcoming fiscal tightening would lead for a current account surplus and the reversal of local dollarization trend. Turkey’s current account deficit shrank by 64% year-on-year in February amid reforms. Additionally, the benchmark interest rate is at a record high of 50%, with the central bank ready to raise it further if needed due to persistent inflation concerns. Market expectations for end-year inflation are around 44%, higher than the central bank's forecast of 36%, which will be updated in early May. March saw inflation accelerate to 68.50%, the highest since November 2022, up from 67.07% in February.
The USDTRY decreased 0.0247 or 0.08% to 32.3376 on Friday May 3 from 32.3622 in the previous trading session. Historically, the Turkish Lira reached an all time high of 33.81 in April of 2024. Turkish Lira - data, forecasts, historical chart - was last updated on May 5 of 2024.
The USDTRY decreased 0.0247 or 0.08% to 32.3376 on Friday May 3 from 32.3622 in the previous trading session. The Turkish Lira is expected to trade at 32.91 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 34.34 in 12 months time.