Bloomberg News

Lira ‘Susceptible’, Bank May Allow More Weakness, Goldman Says

June 16, 2011

June 16 (Bloomberg) -- Turkey’s central bank may allow the lira to fall further against the dollar as it continues to build foreign currency reserves, Goldman Sachs Group Inc. said.

“The central bank’s policy stance remains dovish, looking through the acceleration in both headline CPI and core inflation measures, and, at the same time, intervening to weaken the lira,” Goldman economist Ahmet Akarli said in an e-mailed report today.

“This leaves the lira susceptible to potential capital account incidents,” Akarli said.

“The central bank may well be inclined to accommodate further lira weakness for a while longer, provided that the adjustment remains orderly, he said. ‘‘This is consistent with the fact that the bank is still accumulating foreign exchange reserves.’’

To contact the reporter on this story: Mark Bentley in Istanbul at mbentley3@bloomberg.net

To contact the editor responsible for this story: Aydan Eksin at aeksin@bloomberg.net


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