Goldman Sachs sees lira/dollar at 2.5

NEW YORK

REUTERS Photo

American bank Goldman Sachs predicted the Turkish Lira’s recent recovery is not sustainable and the dollar will climb up to 2.5 against the Turkish currency in six months to a year.

The bank said the lira covered around 40 percent of the value it lost between May 2014 and January 2014, making the currency around 5.5 percent over-valued.

However, it added lira’s ascent is not sustainable, citing a global environment that “will become supportive of the dollar,” and “the damage the currency rate will create on macroeconomic recovery.”

The bank also added it postponed expectation of Central Bank to hike interest rates by 200 base points to the second half of the year due to the rise in the lira.