Economic Calendar

Friday, August 1, 2008

Turkish Lira Forecast Raised by Deutsche Bank on Court Decision

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By Justin Carrigan

Aug. 1 (Bloomberg) -- Deutsche Bank AG, the world's biggest currency trader, raised its forecast for the lira against the dollar after Prime Minister Recep Tayyip Erdogan's Justice and Development Party escaped a constitutional ban.

The currency will end the year at 1.20 per dollar, Arend Kapteyn, chief economist for Europe, Africa and the Middle East at Deutsche Bank in London, wrote in a report dated today. The bank's previous estimate was 1.41 per dollar.

The Constitutional Court's decision ``radically changes Turkey's financing outlook,'' Kapteyn wrote. If the party had been banned, ``the privatization pipeline would have stalled, foreign-exchange deposit build-up by residents would have accelerated and appetite for equities and bonds would have likely further waned.''

The lira traded at 1.1625 per dollar as of 9 a.m. in Istanbul today. It has strengthened 3.8 percent versus the U.S. currency this week.

To contact the reporters on this story: Justin Carrigan in London at

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