Morgan Stanley Is Positive Towards Turkish Assets

Morgan Stanley said it is positive towards Turkish assets. The institution stated that Turkish assets performed better than their counterparts.

Morgan Stanley declared in a research report that they are "tactically" positive towards Turkish assets and that they think the Turkish Lira will drop to the level of 6.80. Morgan Stanley pointed out that the CBRT will not change the policy rate in the next meeting with the inflation realized above the expectations of the Central Bank of the Republic of Turkey (CBRT) along with the strong growth, and said that they think the tight stance will continue. Stating that the rate hike depends on market expectations, the institution noted: "We maintain our view that the CBRT will raise an interest rate of 100 basis points in the near future." Stating that the increasing credibility of economic policies supports Turkish assets to perform better than their counterparts, Morgan Stanley stated that economic growth is seen at a healthy pace when growth indicators are considered. The bank emphasized that the main problem for high returns in fixed income securities in Turkey is how long the orthodox stance of the central bank will continue, and stated that the Monetary Policy Board meeting in March will be more important for the markets than the February meeting. Stating that inflation in services has relatively stabilized, but the inflation pressure in core goods is still continuing, the bank underlined that the minimum wage increase will continue to press the core inflation upward in the near term. Mentioning that the dollarization trend has not reversed yet, the bank stated that the risk/reward balance on the exchange rate started to deteriorate gradually.       Source: Bloomberg HT