INFLATIONARY PRESSURES ON LIRA WILL CONTINUE
As the correction of the U.S. economy continues and the Fed increases interest rates, the US dollar is likely to appreciate globally in 2018. This effect will be reflected in a higher degree of negativity on emerging market currencies, and more so the Turkish lira relative to the currencies of other developing countries. Increasing borrowing needs of the Treasury, the current account deficit problem and the growth that does not reduce unemployment are likely to continue in 2018 as a problem of the Turkish economy. As inflationary pressures will continue to have an impact on the Turkish lira, there may be a noticeable rise in both the exchange and interest rates, especially in April-May. In the first half of 2018, there is a potential for the dollar/TL rate to rise above 4.25 and the benchmark bond interest rates to exceed 15 to 16 percent as the costs of the measures introduced in 2017, such as KGF, started to be felt. For this reason, I recommend that companies or individuals who have net foreign currency debt or net foreign exchange liabilities and who need to borrow in the first half of 2018 take the necessary precautions today to minimize these risks.