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Lira to fall further as policy response fails to appease

The Turkish lira has continued to weaken in recent weeks and, with the response by policymakers likely to fail to placate investors, we now expect the currency to fall to as low as 9.25/$ by the end of next year. What’s more, the risks lie firmly towards more abrupt falls in the lira in the near-term that ultimately force the central bank into aggressive hikes to policy rates.

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