Page 84 - TURKRptMay19

Lira “remains vulnerable to shocks”. Jason Tuvey of Capital Economics said in a research note on the March inflation data: “Recent developments show that the direction of monetary policy will be heavily dependent on what happens to the lira. Following a recent currency sell-off, the central bank suspended liquidity provision via its one-week repo facility, causing 3m interbank rates to rise by 225bp. While Turkey’s current account position has improved markedly since last year’s currency crisis, we’ve noted before that the lira remains vulnerable to shocks. Geopolitical tensions with the US are building again and the direction of policymaking remains a key concern for investors. This is likely to limit the scope for monetary easing which might otherwise be warranted by a further decline in inflation.”
8.3 Stock market
84 TURKEY Country Report May 2019 www.intellinews.com