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Investing.com - Barclays expects Turkish authorities to maintain the current pace of lira depreciation as an inflation-stabilization tool, the bank said in a research note. The firm set a year-end target of 50.25 for USD/TRY.
The global VaR shock and surging oil prices triggered a significant outflow of portfolio investments from the Turkish lira. The Central Bank of Turkey cushioned the impact using its foreign exchange reserves and limited local demand for dollars by increasing TRY OMO funding rates by 300 basis points.
Barclays said the Central Bank of Turkey has enough hard currency at its disposal to continue its foreign exchange stabilization policy, even at current oil prices. The bank maintains its view that the depreciation pace remains an important tool for Turkish monetary authorities.
The Turkish lira has faced pressure from both global market volatility and rising oil prices, which have contributed to portfolio outflows. The central bank’s response included both reserve deployment and interest rate adjustments to manage currency stability.
Barclays projects the USD/TRY exchange rate will reach 50.25 by the end of 2026.
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