It’s been a hard series of months for the state of the global economy with many countries hiking interest rates to try and curb high levels of inflation, and the situation is no different in Türkiye.
However with the potential revival of ‘Lira Carry Trade’, and the continued overhaul of economic policy in Ankara, analysts from Goldman Sachs are predicting a return to rate normalization and a much more positive outlook by the end of the year.
Only last week the central bank further increased interest rates, and they wouldn’t hesitate to do so again if needed, with the backing of President Erdogan who is keen for a policy ‘which rebuilds currency reserves, cools inflation and halts the current account deficits.’
The recent report by Goldman Sachs highlighted Türkiye’s new approach suggesting that deposit rates are likely to increase with the support of a positive strategy, something that hasn’t been seen or publicly backed until recently.
A ‘Carry Trade’ policy essentially means that investors borrow money in lower-interest rate countries to then invest in a currency with a higher return, and overall such a positive outlook should see a good return from foreign investors and those interested in the ‘Carry Trade’ scenario.
