Carry On The TRY

March 2007 | Market Alert

The stability being witnessed in global financial markets over the past few days has allowed the Turkish lira to bounce back, somewhat impressively. Despite the plethora of short-term risks, we maintain our medium-term positive stance towards the TRY. Interest rates are unlikely to come down just yet, with inflation remaining stubbornly high. As such, with overnight deposits rates trading around 17.50% on the bid side, the carry is still highly attractive. Against the euro, resistance exists at TRY1.8600US$/EUR. A break through this point would trigger further short-term gains. Of course, much will depend on the movements of the yen, and

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