Lira to outperform Hungarian currency

Bloomberg

The lira may advance by around 5 percent against the Hungarian forint in one month to 147 on speculation the IMF may grant the country access to a flexible credit line for countries with sound public finance, said Benoit Anne, emerging-market currency strategist in London.

Economy Minister Mehmet Şimşek will meet IMF Managing Director Dominique Strauss-Kahn in Washington at the weekend to discuss a new accord, the Turkish Treasury said Wednesday.

Turkey is seeking between $20 billion and $40 billion from the IMF to help shield the economy against the global financial crisis. The economy shrank 6.2 percent in the fourth quarter of 2008, unemployment rose to a record in the three months through February and industrial output plunged the most since 1986, when records began. "We’re bullish on the lira and recommend buying the Turkish currency against the Hungarian forint," Anne said. "We think the lira will outperform its peers. We expect other emerging Europe currencies to sell off in the next six months due to concerns about growth and higher risk aversion."