Goldman Sachs Forecasts Positive Performance for Turkish Lira Post-Election

In its first assessment published after the election, Goldman Sachs stated that it expected a positive performance for the Turkish lira.

Goldman Sachs economists expect the Turkish lira to perform better compared to previous months, with increasing capital flows after the election is behind us.

Goldman Sachs economists, including Clemens Grafe, predicted that the local elections in Turkiye would be largely uncontested and the message that current economic policies would be continued would be welcomed by the markets.

In the report, it was reminded that there was a serious loss in the reserves of the Central Bank of the Republic of Turkiye (CBRT) due to capital outflows and election uncertainty since the beginning of the year.

However, it was predicted that capital inflow would start again in the coming weeks only by continuing the current policies. It was estimated that TL would show a much better performance compared to previous months, with the effect of the rapid improvement in the current account balance.

Messages of ‘continuation of the program’ were received from the economic management

President Recep Tayyip Erdogan signaled that economic policies will continue in his “balcony” speech in Ankara.

In his speech after the local election results became clear, in which the AK Party suffered a serious loss, Erdogan said, “We have determinedly implemented our OVP and 12th Development Plan, which are our road map in the economy, so far. We will start to see the positive results of our economic program, especially inflation, in the second half of the year.”

Minister of Treasury and Finance Mehmet Simsek said that they will strengthen and continue to implement the Medium Term Program (MTP), which was announced in September 2023 after the local elections, with determination.

Making a statement on the social media platform X, Simsek said: “In order to permanently reduce inflation to single digits, which is our main goal, we will prioritize savings by controlling public spending in addition to tight monetary, selective credit and income policies.”

Source: Bloomberght / Prepared by Irem Yildiz

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