Commerzbank Says Lira’s Decline Still Falls Short of Fair Value
The bank says annualized nominal depreciation of about 20% has not erased real appreciation as inflation remains at 30%-35%.
Key takeaways
- Commerzbank economist Tatha Ghose says the lira’s annualized nominal depreciation has been about 20%.
- Ghose says inflation of 30%-35% means the lira continues to appreciate in real terms.
Commerzbank says the Turkish lira’s recent depreciation has not brought it to fair value, and the risk of further losses remains. Economist Tatha Ghose wrote in a report Thursday that the currency’s annualized nominal decline has been about 20% in recent months.
Ghose said he had not seen a clear pickup in the pace of depreciation in recent days or weeks. But he described the lira as following a steady, rapid path of decline.
With inflation at 30%-35%, the roughly 20% annualized depreciation rate means the lira continues to appreciate in real terms, Ghose said. He said the decline had not been fast enough to erase that real appreciation or necessarily move the exchange rate toward fair value.
This article was produced with the help of AI technology. Based on reporting by the outlets listed above.
