Invest in lira, analyst says

Bloomberg

Merrill recommended investors buy the lira against the rand, targeting the level of 6.30. "The view of our economics team is that the Turkish government needs an IMF program to be put in place as soon as possible, and this may take place once the March 29 local elections are out of the way," Benoit Anne, an emerging-market strategist in London, wrote in a client note yesterday.

"The news of an IMF program would provide a serious boost to investor confidence, together with a much-needed financial package," Anne wrote. "The umbrella of the program may be instrumental in influencing retail-investor portfolio decisions in the favor of the lira against the dollar."

The lira may also rise against the rand as South Africa "has lagged behind" with rate cuts and will probably head toward bigger monetary easing later this year.