Citi returns to long position in USD/TL

Citi strategists stated in a note issued after the TCMB interest rate decision that the institution’s model portfolio was updated to long USD/TL. Citi strategists Luis E Costa and Bhumika Gupta stated in a note they published after the TCMB interest rate hike decision, “We are returning to a long USD/TL position in our model portfolio.” The institution recommended a 3-month forward USD/TL purchase with a target of 30 and a stop loss of 22. Strategists foresee potential steps such as the partial removal of the KKM, which could increase dollar demand. Citi strategists reported that the risk to their recommendations is that the economy responds to a higher USD/TL and interest rate shock, and regulators return to the status quo.