Thread by @AndreasSteno

TURKEY has been in the limelight recently with Erdogan winning yet another term (again) and TRY trading like Venezuelan Bolivar. But what is going on with Turkey these days?

Turkey 🧵 1/

#TRY $TRY

While Inflation has been met with rate cuts, foreign sovereign bond investors have cut tail and ran. Meanwhile the vulnerability of relying on foreign in-flows has been exposed causing a MASSIVE pressure on the TRY and the current account deficit grown 2/

The implicit policy aim by Erdogan has been to attempt to fight inflation with public spending cuts and loose monetary policy to help out indebted buisnesses facing high costs - Needless to say this exotic policy mix has not worked 3/

While the economy has thrived in real terms the industry has not been booming. Instead much of the credit growth has been going to households who have spent on foreign goods adding to the balance problem 4/

While markets have punished bond holders Turkish equities have been flying high on the sugar rush. But with the economy turning and the lira under severe pressure where will the markets likely go and how to trade it? 5/

You can follow our Head of Research @EmilMoller10 and read his full editorial here buff.ly/3C89TnR 6/6