Morgan Stanley Announced Its USD/TL Forecast

Morgan Stanley announced its USD/TL Forecast. The institution stated that the USD/TL rate will be balanced at the level of 7.75.

Morgan Stanley economists announced that they expect the weakness in Turkish Lira assets to continue even if the Central Bank of the Republic of Turkey (CBRT) increases the interest rate by 75-100 basis points in line with the expectations on March 18. Economists said in their reports, "We expect a 100 basis point increase in front-loaded interest rates from the CBRT due to high inflation, oil prices and weak exchange rates." Economists said, "We think that even if the interest rate increases in line with the market expectations, the USD/TL exchange rate will stabilize at the level of 7.75 and the CDS will remain around 350 due to the weaknesses in developing countries." The Morgan Stanley report included the following statements: "We think there will be gains in the event of a higher than expected rate increase; however, we do not expect the USD/TL exchange rate and CDSs to test the lows of 2021. In the event of a below-expected rate increase, we expect the TL assets to remain weak and retest their levels in November." Earlier, Morgan Stanley analysts stated in the report they presented in February that they were of the opinion that the USD/TL exchange rate could fall to 6.80 in anticipation of a new rate increase. Foreseeing an increase of 100 basis points in the short term, analysts stated that they have a positive view for Turkish stocks.     This article has contributions of Bloomberg HT.