World Bulletin / News Desk
The Turkish lira is likely to rally against the U.S. dollar in the near-term following the vote to introduce a presidential system in Turkey, analysts said Friday.
Sunday’s vote on an 18-article bill that would introduce an executive presidency was narrowly approved by voters. President Recep Tayyip Erdogan had pledged that a Yes vote would pave the way for economic and social stability.
“We foresee near-term appreciation in the lira,” Gautam Kalani, FX economist and an emerging markets strategist at Deustche Bank, said.
“The key point in that since the referendum, there has not been much reaction and now we are starting to see that in the last one or two days.”
The lira currently stands at around 2.65 to the dollar.
Kalani added: “The referendum being completed means that one key event is out of the way, while the lira remains cheap and positioning very light.
“We believe the lira could appreciate around 3-4 percent in the next three months.”
Following the Yes win, the likelihood of an early general election has receded, Nafez Zouk, a senior economist at the London-based Oxford Economics think tank, said.
He predicted the lira could be 3.5 to the dollar by the end of the year.
“Before a sustainable rally in the lira is possible, the ruling Justice and Development Party and President Erdogan need to demonstrate that they are serious about using the remaining two-and-a-half years before the next election to get the economic reform agenda back on track,” he said.
Timothy Ash, a senior emerging market strategist at London-based BlueBay Asset Management, said overcoming political uncertainty would encourage Turkey’s economy.
“The local lira still cheap on a historical real effective exchange rate basis, positioning still favourable,” he said.
“The Turkish Central Bank has tightened policy and Turkey offers double digits yields which are rare these days even in emerging markets.”
US' James Mattis calls arming terrorist group necessity, not preference, responding to Fikri Isik's concerns
Philippines' NGO President Aladdin Palanggalan says Turkish aid agency is ‘solution partner’
Almost 160 million vehicles used Turkey's toll bridges and highways between January and May
Policeman was hit during anti-PKK operation in southeastern Hakkari province
Security forces conduct 835 operations against terror groups between June 19 and 28
BIST 100 index falls 0.20 pct while US dollar/Turkish lira rate stands at 3.5210
Operation launched in Sirnak province after PKK terrorists fire at military vehicle
Mortar fired from northern Iraq hits hill in southeastern Hakkari province
Deployment of Turkish army in Qatar is in line with 2014 bilateral cooperation deal, Foreign Ministry spokesman says
Port city's 2 airports witness traffic of over 114,000 flights in April and May, state airport administration figures shows
Turkish president says demands by Saudi-led blockade 'breach of Qatar's sovereignty rights'
Latest operation comes just a day ahead of Eid al-Fitr
Turkish president, prime minister and army chief issue Eid al-Fitr messages
Friday's PKK attack in eastern Bingol province had left the soldier in critical condition
Soldiers injured by improvised explosive in rural area of Bingol's Genc district
Counterterrorism operations in Siirt province leave three terrorists dead, three others injured