By Kerim Karakaya
(Bloomberg) — Citigroup underweights lira in its model
portfolio after the government’s steps to reduce the size of
foreign currency protected deposits.
* Bank now going long USD/TRY at 27.16 (via 3m forwards), with a
target 32, stop 25
* “In light of the macro prudential measures taken by the CBT
over the weekend to reduce the size of currency protected
deposits, we think the timing is now suitable for re-entering
this trade,” strategists Bhumika Gupta and Luis E Costa wrote in
a note.
* “MPC is also scheduled this week, and the consensus
expectation is for a hike to 20% policy rate, from the current
17.5%. We see some risk that markets may be disappointed again,
given the new Governor’s track record so far with respect to the
magnitude of rate increases”
* “Also, the net reserves picture remains challenging in Turkey”
* NOTE: Lira Lifesaver Became $124 Billion Gamble That Now
Haunts Turkey
* NOTE: Turkey Starts Curbing FX Tool Imposed to Halt Lira
Selloff
To contact the reporter on this story:
Kerim Karakaya in London at [email protected]
To contact the editors responsible for this story:
Benjamin Harvey at [email protected]
Neil Chatterjee
