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Turkey’s currency is likely to depreciate in 2023

Monday, February 13, 2023


The stability of the lira since June 2022 is primarily a result of President Recep Tayyip Erdogan’s government shoring up the currency despite cutting interest rates. The authorities are eager to curtail inflation ahead of the May presidential and parliamentary elections.


  • Official annual consumer price inflation may prove 'sticky' at about 40% year-on-year by end-2023.
  • The lira is likely to remain weak enough to keep Turkey’s export and tourism sectors competitive.
  • Risks related to exchange rate-guaranteed bank accounts, negative real interest rates and the banks may persist into 2024.

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