Sovereign Analysis /
Turkey

Turkey: Rate cut puts lira on back foot

  • Premature rate cut likely to trigger further TRY weakness, with inflation and inflation expectations still elevated

  • External imbalances have moderated amid falling trade deficit and rising tourism, but cut raises risk of capital flight

  • Downgrade from Hold to Sell on local debt due to prospects for further TRY weakness; maintain Hold for Turkish credit

Turkey: Rate cut puts lira on back foot
Patrick Curran
Tellimer Research
27 September 2021
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