TRY: Future is uncertain – Rabobank

Following the announcement that Turkey will hold early general and presidential elections the lira had stabilised on the back of assumption that the governing AKP may refrain from injecting even more stimulus to already overheated economy, points out the research team at Rabobank.

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“This notion, however, is under serious threat after Prime Minister Yildirim proclaimed at least USD 5.9bn of additional spending, which renewed selling pressure on Turkish bonds and reignited the upside traction in USD/TRY and EUR/TRY.”

“In addition to that, S&P lowered its sovereign debt rating on Turkey further into junk territory.”