Lira stability may give way to further pronounced weakness

We think that the surprising stability of the Turkish lira so far this year will not last much longer and we forecast it to weaken against the dollar over the coming months, from ~14.8/$ now to 18/$ by end-2022. This would be a fall of around 20% and, even then, we think the risks are skewed firmly to the downside. In view of the wider interest, we are also sending this FX Markets Update to clients of our Emerging Europe Service.

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