The Turkish lira continued its downward slide for a tenth consecutive session, reaching lows near 39.68 against the dollar, fueled by escalating tensions in the Middle East, particularly the conflict between Iran and Israel. According to recent data, the currency is trading near record lows.
The Istanbul stock exchange also suffered, mirroring the tenth consecutive session's decline. Credit risk in Turkey has increased, with potential defaults looming for the tenth consecutive session.
The Central Bank of Turkey has signaled a possible rate hike of 46% to combat inflation and geopolitical risks. Rising oil prices, due to the Iran-Israel conflict, could further exacerbate inflation.
In the coming months, banks are expected to provide forecasts for their policies. Citigroup anticipates a rate cut of 250 basis points in the coming months, although this has not been confirmed.