Goldman Sachs expects that the price of the Turkish lira in the next three months will range between seven and 7.5 pounds to a dollar.
With these expectations from the most famous banking institution in the United States and the world, the Turkish lira has failed to compensate for the losses it suffered throughout the year 2020, losing 30% of its value.
Goldman Sachs said Turkey’s central bank’s efforts to rebuild reserves could dampen its gains.
Regarding the pound’s expectations for between six and 12 months, Tom Arnold of Goldman wrote that it would range between seven and 7.5, consistent with “the possibility that the extent of the lira’s rise is limited.”
The central bank governor had said in December that the bank had forecast inflation of 9.4 percent by the end of 2021 and was targeting a rate of 5 percent in 2023.
Economists predicted in a Reuters poll that annual inflation in Turkey is expected to reach 14.20 percent at the end of 2020, surpassing government estimates after a strong weakening of the lira for most of the year.
Inflation remained around 12 percent for most of 2020 before unexpectedly climbing above 14 percent in November after the lira’s value, which has at one point fell 30 percent against the dollar, since the start of the year.
According to data from the Turkish Ministry of Trade, Turkey’s trade deficit increased by 69.12 percent to 49.91 billion dollars last year, according to the general trade system.
Ministry data showed that imports increased 4.32 percent to 219.43 billion dollars in 2020, while exports fell 6.26 percent to 169.51 billion dollars.
In December, imports rose 11.75 percent to $ 22.41 billion, while exports also increased 15.97 percent to $ 17.84 billion.
The Republican People’s Party, the largest opposition party in the country, accused the ruling regime of wasting $ 128 billion during the 8 months of 2020, due to the decision to raise interest rates to stabilize the Turkish lira’s exchange rate.
President Erdogan’s policies and his interventions in local financial and monetary institutions, his insistence on supporting terrorism, and interfering in the affairs of the countries of the region have exacerbated the Turkish economic crisis.
The decline in the local currency caused an increase in the prices of imported goods from abroad, along with a rise in labor wages, prompting foreign producers and consumers to carry exchange rate differences to the final consumer, resulting in an increase in inflation rates.