Foreign banks Raise Dollar Forecasts for Turkish Lira as Uncertainty Looms
ISTANBUL – A wave of revised forecasts from major international banks signals growing concern over the future of the Turkish Lira. Driven by ongoing political uncertainties and stubbornly high inflation, financial institutions are predicting a weaker Lira against the US dollar, both for the remainder of 2024 and into 2025.
The shift in outlook comes as recent economic data has shaken confidence in the lira. Elevated inflation figures,exceeding expectations,have contributed to a loss of trust among foreign investors and financial institutions.
ING, a leading global financial institution, now anticipates the USD/TRY exchange rate to reach 45.00 by the end of 2024, and a further increase to 53.00 by the end of 2025. The bank’s report notes that the tightening of monetary policy, while intended to stabilize the Lira, is also creating demand for foreign currency.
J.P.Morgan has issued the highest forecast among the surveyed banks, predicting the dollar will reach 45 TL in 2025.
Other prominent banks have also adjusted their predictions. Goldman sachs forecasts a USD/TRY rate of 44 TL, while Deutsche Bank and Morgan Stanley predict a rate of 43 TL. HSBC,another banking giant,has revised its year-end expectation to a range of 42 to 44 TL.
The Central Bank of the Republic of Türkiye (CBRT) Market Participants Survey echoes these concerns, with the median forecast for the USD/TRY exchange rate in 2025 standing at 43.96 TL.
Collectively,these reports indicate an expected increase in the dollar’s value against the Lira ranging from 19.3 percent to 28.5 percent, according to the various bank analyses. The forecasts reflect a cautious outlook on Türkiye’s economic trajectory amidst a complex interplay of domestic and global factors.
