Turkish currency could sink to 8 lira to the dollar - SocGen analyst

The Turkish lira may slip to as low as 8.00 to the dollar before recovering to trade at around 7.00 in the middle of next year, financial news website Forex Live reported an analyst working for French bank Societe Generale as predicting.

Analyst Phoenix Kalen said that only when the lira reached 8.00 against the dollar would it “compel Turkey to compromise on some of its strategic objectives," echoing similar comments made by the chief emerging market strategist at SEB in Stockholm, Per Hammarlund, last week.

Commenting on the recent strengthening of the lira over the last week, Kalen was quoted as saying that the rise was unlikely to indicate improving sentiment towards the embattled currency, but rather, "the higher funding rates faced by lenders, and substantially higher costs of holding short-TRY positions."

The article predicted further lira volatility in the short term as thin markets due to holidays in Turkey were liable to “exaggerate any swings … in the lira this week.”  

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