Prominent bank shares report about Turkish economy after election
Bank of America has written a report on the elections and the Turkish economy. The report included possible scenarios that will happen if the opposition wins and returns to orthodox politics. The bank predicted a rise in the dollar/TL after the election.
Economists from Bank of America (BofA), one of the largest banks in the world, have written a report containing post-election scenarios for the Turkish economy and the Turkish lira. The report dated March 30, written by BofA economists Zümrüt Imamoğlu, Merveille Paja, David Hauner and Mikhail Liluashvili, stated that the fair value of the dollar / TL exchange rate is at 24 and that a depreciation of the Turkish lira is a likely scenario no matter who wins the election.
“Regardless of the election result, we anticipate a weaker TL and tightening economic conditions in order to address imbalances in the economy,” the report said.
A DEPRECIATION OF 15-25 PERCENT IS EXPECTED IN THE LIRA
Some of the most important assessments shared in the report were as follows:
* EYT regulation and earthquake-related expenses will put pressure on the financial balance.
* All indicators point to the need for rebalancing of the economy. For this purpose, we believe that financial conditions should be tightened, serious cuts should be made in non-earthquake expenditures and the TL should depreciate by about 15-25 percent.
* CHP leader Kemal Kilicdaroglu promised a return to orthodox politics if they win. If Recep Tayyip Erdogan wins, we expect the current policy framework to be maintained. Regardless of the outcome, we anticipate a weaker TL and tightening economic conditions in order to eliminate imbalances in the economy.
* If the CBRT stops interfering with the exchange rate, the TL may lose value rapidly. In the event of an AKP victory, we expect a more uneven depreciation. Regardless of who wins, we predict that the TL should depreciate by 15-25 percent against the dollar in order to balance the economy.
