(Reuters) – Goldman Sachs said its three-month Turkish forecast is 7.00 to 7.50 to the dollar and said further strengthening could be limited by central bank efforts to rebuild reserves.
The lira has strengthened since early December when the central bank said it would maintain a tight monetary policy in the new year and was willing to raise interest rates even more if necessary to lower inflation in a lasting way.
Goldman said in the note to its three-month forecast that “currency strength could eventually be limited by a necessary effort to rebuild (foreign exchange) reserves. ”
On the six-month to 12-month lira forecast, Goldman’s Tom Arnold wrote that the forecast for 7.00 and 7.50, compared to 7.75 and 8.00 previously, reflected “the likelihood that the lira appreciation rate could be limited. ”.
The regulator said in December that the central bank was forecasting 9.4% inflation by the end of 2021 and aiming for 5% in 2023.
Reporting by Nandakumar D in Bengaluru; Edited by Edmund Blair