WOOD Flash – Turkey macro: hard to navigate amid widespread mistrust
Turkey’s experience is extreme, but not uniqueThe Lira has weakened rapidly in the past month, reaching TRY 12/USD, the level that our fair value model signalled would be appropriate, given the inflation challenges that were evident already before the sell-off. In our view, the strongest challenge facing Turkey is the spiralling erosion in the trust of local participants in the future of the currency and the institutions. Concerns over inflation have been well-signalled in the household surveys since 2018, and this trend, in our view, is the result of three equally important strategic decisions of policy makers: keep the economy growing at the maximum all the times; keep monetary policy as accommodating as is viable; and tolerate inflation at a higher rate than before, to facilitate a better labour market outcome in the short term.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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