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Crisis risks loom for Turkey’s financial markets

President Erdogan looks set to secure victory in the second round of Turkey’s presidential election on 28th May. This Update sets out how we think this would play out in Turkey’s financial markets this year: in short, we think that measures of Turkey’s risk premia would increase significantly and the pace of the Turkish lira’s depreciation against the US dollar would pick up, driving the currency to 26/$ by end-2023.

In view of the wider interest we are also sending this Global Markets Update to clients of our FX Markets and Emerging Europe Economics services.

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