In the next 2023, the dollar will cost 30 Turkish lira – this forecast was presented by experts from the British bank and financial company Standard Chartered Bank. They raised the current forecast of the dollar against the Turkish lira for the second half of 2022 from 12 to 20 lira, which can also be seen as a real collapse of the Turkish currency. Obviously, this will inevitably affect the tourist market and the value of Turkish hotels.
“Unorthodox monetary policy combined with 36 percent high inflation has led to a structural shift for the Turkish lira, resulting in a forecast for the end of 2022 dollar / Turkish lira raised from 12 to 20. By the end of 2023 the dollar is expected to reach 28 lira “, – said the bank’s experts.
A separate point in their report states that the probable recovery that will occur with the revival of tourism in the summer and, consequently, foreign exchange infusions into the Turkish economy will still not be able to “reverse the structural shift” due to “negative net reserves.”
Saying that the recently announced Turkish lira deposit with currency protection did not reduce dollarization contrary to expectations, Standard Chartered stressed that the new instrument poses a risk to public finances. The company’s experts also added that there will be no return to orthodox policy, and monetary policy will remain expansionary until the 2023 elections. As a result, “the possibility of sudden early elections will be one of the other negative factors for the Turkish lira in 2022,” – added British bankers.
This is not the first pessimistic forecast about the fate of the Turkish currency made this year – an avalanche-like rise in consumer prices and a further fall in the lira is promised in a research report published by JP Morgan. “Opinions of some politicians, previous and early reduction of interest rates, deteriorating inflation expectations and the depreciation of the national currency led to a sharp rise in inflation in December,” – said these experts. Following unexpected inflation in late 2021, the bank revised its inflation expectations for 2022 and 2023, predicting that inflation will reach a record 55% in May and will fluctuate around 50% throughout the summer and autumn. “We do not see any signs of” repentance “on the part of politicians, and therefore we do not believe that in the coming months will be a tight monetary policy,” – said bank analysts. Read the details at the link.
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