Here’s What To Expect For Turkish Assets Following The Great Sultan Rally
Monday is "write your own Turkish lira jokes" day.
Thanks in part to President (and newly appointed Sultan) Recep Tayyip ErdoÄŸan and more specifically to his penchant for putting on his rates/FX strategist hat, the poor lira often ends up being the butt of market jokes.
One of my personal favorites on days when the currency is in free fall is: "go home lira, you're drunk."
Well on Monday, everyone has an opinion on what Erdogan's referendum win presages for the currency. Make no mistake,
“question marks are raised about central bank’s ability and/or willingness to keep interest rates high”
This is most interesting considering Erdogan’s recent record, and now having (or soon to have) more teeth. The bankers were quite resistant last year I recall. Wonder how the referendum results change their ‘reaction functions’ when the new Sultan demands they cut rates?
Turkey you have been fu*ked and not the way you wanted.