UK-based bank HSBC raises year-end forecast for dollar/TL  to 24

The UK-based bank HSBC has raised its year-end forecast for the dollar/TL from 21 to 24. Standard Chartered also lowered its economic growth outlook, noting that the dollar/TL could rise to 36 if current policies continue.

While the markets in Turkey are locked in the May 14 elections, post-election analyses continue to come from international organizations.

UK-based bank HSBC raised its dollar/TL forecast from 21 to 24 for the end of 2023, while raising its expectation for the second quarter from 19.5 to 20, and its expectation for the third quarter from 20 to 23.

In the note shared by a strategist from the Bank it was noted that the elections to be held on May 14 could bring important changes for the long and medium-term outlook of the TL, and it was pointed out that the depreciation of the TL was likely regardless of the election result.

The report listed the outstanding challenges for the Turkish lira as ‘high negative interest rates, high current account deficit, lack of stable capital flows, low foreign exchange reserves and the risk related to the sustainability of the lira policy’. The report noted that many of the key variables that stood out for the TL had worsened since the beginning of the year.