Flash Report /
Turkey

Turkish lira reversal and reserve depletion in four charts

  • Lira defense policy triggers 45% rally so far this week and sends TRY volatility to record high

  • Could offer temporary relief, but introduces risk of vicious inflationary spiral if TRY depreciation resumes

  • Rally could be sustained if it’s reversal of prior overshoot, but retain Sell on TRY due to asymmetric downside risk

Turkish lira reversal and reserve depletion in four charts
Patrick Curran
Tellimer Research
23 December 2021
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