Turkey may rank among the top destinations for foreign investors this year, according to Marek Drimal, Chief Strategist for Societe Generale’s CEEMEA (Central and Eastern Europe, Middle East, and Africa) division. Speaking to the EKONOMİ daily, Drimal stated, “We think this will stimulate inflows into emerging markets and Turkey if our projection of three interest rate reductions by the Fed this year comes true.
In the second and third quarters of 2024, he continued, “we expect Turkey and the Turkish Lira to be among the most preferred among emerging markets.” Drimal also stated their opinion that Poland will be one of the developing markets in Central and Eastern Europe and Latin America.
Do you anticipate that foreign exchange inflows into Turkey will increase now that the municipal elections are over?
“Towards the close of 2023, there were some notable inflows into Turkish assets; however, these did not persist into the first quarter of 2024. On the other hand, in February and March, the Central Bank of the Republic of Turkey (TCMB) saw some more depletion of its foreign exchange reserves. Two important elements will determine whether or not this changes. First off, the FOMC interest rate reduction, which takes effect in June, will enhance the interest rate disparity. Second, structural improvement brought about by a decline in seasonal energy imports, an increase in tourism and tourist– related revenue inflows, and strict monetary policy is anticipated to improve Turkey’s current account balance.
Could you provide your forecasts for the future course of the Turkish Lira coming up?
“For the second and third quarters of this year, we anticipated that the USD/TRY exchange rate would be approximately 32. Because of the Central Bank of the Republic of Turkey’s inclination for reserve restructuring, we expect the value of the Turkish Lira to decline in the near future. But by the conclusion of the second and beginning of the third quarter, we anticipate that the Lira will gain strength. We therefore predict a fresh weakness in the last quarter of the year because of unfavourable seasonality in the current account balance.
Source: www.businessturkeytoday.com
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