Turkish policymakers deepened their "lira-isation" drive this week by increasing the incentive for firms to convert their FX earnings into lira, but we're not convinced that the policy changes will be successful. The longer the current unorthodox policy experiment continues in Turkey, the greater the risk of a sudden fall in the currency and strains emerging in the economy. Elsewhere, the Hungarian forint appreciated this week as investors interpreted the central bank’s meeting on Tuesday as a relatively hawkish one. Even so, there was a slight dovish change in guidance and we think the central bank will start to ease monetary conditions later this year.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services