Flash forecast from Commerzbank: Will the Turkish lira fall further by year-end?

14 Ağu 12:43

Commerzbank’s flash forecast isn’t really a surprise, bro, because international banks tend to have very similar predictions when it comes to the currencies of emerging markets. The claim that the TL will weaken even more by year‑end basically stems from Turkey’s external balance problems and the central bank’s struggle to tame inflation. In recent months, the resurgence of inflation, the widening current‑account deficit, and the fact that inflation hasn’t been reined in despite rate cuts are worrying foreign investors. In light of these data, Commerzbank expects the TL to lose another 5‑7 % against a basket of foreign currencies, which translates into a pretty sharp move on an annual basis. But man, you can’t limit this FX volatility to just foreign banks’ forecasts. After all, the TL’s fate is also heavily tied to domestic factors. The central bank’s recent lax stance, the depletion of reserves, and local investors still fleeing to foreign currency all keep the pressure on. Even the short‑lived bounce we saw in the first months of the year didn’t stick, showing how sensitive the market is. So Commerzbank’s estimate isn’t just a scenario—it can also be seen as a continuation of the current trend. To see a twist, you’d first need inflation to lose momentum and the central bank to adopt a tighter stance.