The recent appreciation of the Turkish lira has caused the central bank’s (CBRT’s) MPC to adopt a more dovish stance, with Governor Basci suggesting that measures might be taken this month to loosen monetary conditions. For our part, we think it would be more prudent for the CBRT to refrain from easing. Inflation is likely to remain well above target both this year and next, and the current account deficit is still large. As such, looser policy could make the lira more vulnerable to a fresh sell-off.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services