HSBC revises its forecast for USD/TRY exchange rate for yearend: 1 Dollar = 36 TL

HSBC has revised its forecast for the USD/TRY exchange rate for the end of the year. The UK-based banking giant noted in its analysis that the depreciation of the Turkish lira (TRY) has been faster than expected.

HSBC shared the following: “Assuming a real depreciation of the Turkish lira of around 10 percent and taking a rough average of three different inflation scenarios, we are revising our USD-TRY year-end forecast from 33.0 to 36.0.”

The bank acknowledges that this analysis simplifies several moving parts in the macroeconomic landscape of the Turkish lira. For instance, inflation could be significantly higher than the Central Bank of the Republic of Turkey’s (TCMB) forecast by the end of 2024.

However, in such a scenario, HSBC assumes that the Central Bank would further tighten its monetary policy, partially offsetting the negative impact of high inflation on the exchange rate. Nevertheless, HSBC believes that this analysis provides a broad idea of how much the USD/TRY could rise.