Dollar/TL short position advice from UBS
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While the investor meetings of the Central Bank of the Republic of Turkey (CBRT) in New York stand out as an important topic, foreign institutions also publish analyzes regarding the Turkish lira.
One of them is UBS. In the report prepared by UBS Emerging Markets Strategists Nimrod Mevorach, Manik Narain and Economist Gyorgy Kovacs, dated January 11, a short position recommendation was given in Dollar-TL via 3-month forward starting from November 23. The UBS team stated that they think the slope of the dollar and TL against forward transactions is still downwards in the medium term.
In the report cited by Bloomberg HT, it was stated that the end of the long-term period of high negative real interest poses a downside risk on the current account deficit projection of 39 billion dollars for 2024, through weakening domestic demand and reduced incentives for gold imports.
The UBS team noted that December’s leading trade deficit showed that trade imbalances were slowly improving, and on the financing side, there was also room for portfolio (and carry) inflows from the low level of foreign participation.
The report also emphasized that “other investment” inflows are likely to continue in the coming quarters due to the $50 billion agreement signed with the UAE in July last year.
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