Turkish Lira’s Artificial Stabilization May be Nearing Its Limit

The Turkish lira’s sharp falls Monday show that policy makers’ measures to artificially stabilize the currency are reaching their limits, Commerzbank says. Turkey’s central bank will try to prevent a lira crash before the second round of the presidential election on May 28 but it “cannot work magic,” Commerzbank currency analyst Ulrich Leuchtmann says in a note. “Even before the second round of voting, a scenario is possible in which the dams burst and the lira takes a depreciation hit.”

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