Foreign banks cannot make dollar TL estimates after dismissal of CBRT Governor

It is reported that foreign banks have cancelled last week’s positive expectations for the dollar and they believe it is almost impossible to make new forecasts in regards. After the dismissal of AGBAL, the governor of CBT there was a sharp increase and fluctuation in the dollar/TL exchange rate is observed which seems to make it increasingly difficult for foreign banks to forecast exchange rates.

Bloomberg has published an analysis titled “Banks have torn up analysis-based TL estimates”. In the analysis it was emphasized that forecasting, which was already difficult in the past in developing countries, is now almost impossible in Turkey.

HERE ARE SOME PREDICTIONS SHARED BY BANKS

“If there is one thing analysts agree on, it is that the TL will probably depreciate” the article said, noting that the risk of increasing turbulence with U-turns in economic policy has made the forecast business a non-supportive assumption.” It was also mentioned in the article Societe Generale SA, Commerzbank AG and Rabobank expected a depreciation of about 20 percent in TL.

Germany’s Commerzbank, which was reported to have difficulty making forecasts, used the level 10 as a symbolic figure for the dollar/TL, it was quoted in the article.

“Chief Emerging Markets Strategist” at France’s Societe Generale predicted that the TL would depreciate between 20 percent and 40 percent against the dollar in the coming months, which would force Ankara to take aggressive steps. According to same opinion, the dollar/TL is expected to rise to 9.7 by the end of June.