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Goldman Sachs urges caution on Turkish banks ahead of elections


Goldman Sachs urges caution when investing in Turkish banks ahead of the upcoming May 14 parliamentary and presidential elections. Shares of creditors may be more vulnerable than shares of other companies in the country, due to a possible increase in interest rates after the vote, according to Reuters.


According to a number of polls, current President Recep Tayyip Erdogan risks losing the election mainly due to inflation, which rose to more than 85% last year amid failed monetary policy.


Turkish banks have historically benefited from higher interest rates, but last November the government introduced new rules effectively forcing banks to lend at a lower rate, according to an investment bank.


After the transition to short-term lending, banks remain resilient, although regulators have lifted the cap on foreign-currency-insured deposits to ease pressure on the lira. However, according to Goldman Sachs, if the opposition wins, banks may suffer.

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Forex Award | World Forex Award | Forex
Forex Award | World Forex Award | Forex
Forex Award | World Forex Award | Forex
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