In JP Morgan’s report the following was stated, “TL is the cheapest currency in emerging markets according to the deviation from the long-term real effective exchange rate average.”
JP Morgan, an investment bank headquartered in the USA, stated that the Turkish lira (TL) is cheaper than its fair value and noted that there is no need for depreciation from now on.
JP Morgan’s report titled “Europe, Middle East and Africa, Emerging Markets and Local Markets Compass” also included evaluations about Turkiye.
The report stated that macroeconomic policies are progressing in the right direction and said, “Since the TL has become very cheap in fundamental terms, it is now less of a concern that high inflation reduces competitiveness. They can keep the TL largely stable without compromising reserve growth.”
In the report, which included the assessment that “TL is the cheapest currency in emerging markets according to the deviation from the long-term real effective exchange rate average”, attention was also drawn to the stability of the euro/TL cross.
In the report the following was reported, “The stability in Euro/TL may indicate the general risk appetite and the desire to reflect global dollar trends in the behavior of TL. While Euro/TL remained flat, dollar/TL completely reflected the decline in the euro/dollar cross in the recent period.”
JP Morgan pointed out this development in TL in its report and said, “By reflecting this in our model portfolio, we reduce the weight in the Czech Koruna and increase the weight in the TL.” JP Morgan, which started recommending “increase weight in TL” at the beginning of September, said in its client note dated September 8, “We are adding a small amount of ‘increase weight in TL’ position to our model portfolio.”
We took a long TL position in options at the beginning of July. “We now think that the risk/reward balance is in favor of direct TL purchases.”
Goldman Sachs also highlighted the gains in TL to its customers with its report titled “TL is back in the game” on September 28.
Source: AA / Prepared by Irem Yildiz