BofA Global Research stated that they prefer short-term fixed and TLREF bonds in Türkiye because they provide a carry guarantee if held to maturity.
In a recent note, the bank highlighted that the market is aligned with 2025 forecasts, making the likelihood of further rate cuts or tighter ASWs low. Additionally, it pointed out that TLREF bonds are currently overvalued.
BofA Maintains Long Position in Turkish Lira
The bank also noted that it is maintaining its long position in the Turkish lira with a three-month maturity until April 17 against an equal basket of EUR and USD. “This strategy helps investors lock in carry if held until maturity. TLREF-linked bonds are not attractive relative to our policy rate and are currently priced above 100,” BofA stated in its analysis.
Source: Foreks/ Prepared by: İlayda Gök