Turkey is every analyst’s favourite subject because everything there is so nice and simple, in the view of economists at Commerzbank. They believe that there is no endpoint for lira depreciation.
TRY will continue to depreciate with increased speed
“If a central bank gets everything wrong, the currency will collapse. Of course, there are always TRY bulls (even at this stage?!?) who do not want to see that. However, that is the nice thing for TRY-analysts: that one is correct in the end.”
“The only issue is: there are still people who want to know how much further the TRY depreciation is going to go – despite the fact that the answer is simple: there is no limit.”
“As long as monetary policy allows inflation to simply progress inflation will continue to accelerate. And as long as that remains foreseeable the lira will continue to depreciate with increased speed. There are no ‘fair’ levels at which this process might end.”
