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JPMorgan backs bounce in Turkey’s lira as key 2024 bet

Turkey lira reserves Reuters/Dado Ruvic
The value of Turkey's lira has plummeted in recent years, but significant interest rates hikes have created more optimism

Investment bank JPMorgan on Tuesday backed a bounce in Turkey’s lira as one of its key emerging market bets for 2024.

The value of Turkey’s currency has plummeted in recent years, but a screeching 180-degree change of policy direction following President Tayyip Erdogan’s re-election win this year has seen interest rates hiked significantly, creating more optimism.

“The first theme [of 2024] is recovery trades,” JPMorgan said, highlighting Turkey alongside Poland, South Africa and Israel.

“We add short six-month USDTRY forward to our existing overweight on TRY,” it added, referring to a bet for Turkey’s lira to rise against the dollar.  

Earlier this week the Turkish central bank’s total reserves rose $6 billion last week to $134.5 billion, the highest since September 2014, Reuters reported, citing calculations from four bankers.