USD/TRY exchange rate keeps on hitting new all-time highs every day as the Turkish elections approach. The latest analysis shows that the dollar to Lira rate may keep surging in the coming months, even after the elections. The upcoming elections are being seen as the make-or-break point in economic history as major changes are expected from the new government.
Since the start of 2023, the Turkish Lira has depreciated by more than 4% in terms of the US dollar. Within the first 20 days of April, USD/TRY has already fallen by 1.43%. At the time of writing, the pair is trading at 19.4 after showing minor gains during its London session.
According to the most recent Turkish Lira news, analysts at JPMorgan expect the currency to tank even after the elections. This is because the analysts don’t expect major changes in the company’s unorthodox economic policies. They have given two possible scenarios for the Dollar to Lira exchange rate depending on the new government’s commitment.
If the new government shows a strong commitment to change the existing policies, then the USD/TRY forecast for the end of 2023 is 24-26. However, in case of a modest commitment toward the cause, Lira may drop to 30 in terms of the greenback.
The Turkish presidential and parliamentarian elections will be held on May 14. These are expected to be tightly contested elections where the incumbent Erdogan government will face strong opposition. In the turbulent situation and economic uncertainty, I won’t be surprised if USD/TRY surges above 20 before the elections.
The DXY index also keeps the Turkish Lira exchange rate in check. Despite a massive drop in the past few weeks in DXY, Lira has failed to gain any strength. Therefore, a bounce in the DXY index may cause USD/TRY to surge even above 20.
I’ll keep sharing my updated outlook on the Turkish Lira in my free Telegram group, which you’re welcome to join.
This post was last modified on %s = human-readable time difference 13:15