Positive Shift in Amundi’s Stance: Amundi, the prominent European asset manager overseeing $2 trillion, is cautiously reconsidering its position on the Turkish lira. This move comes in response to the impressive turnaround efforts observed in Turkey since mid-year elections.
Gradual Adjustment in Currency Position: While Amundi is not fully committing to the Turkish lira due to its ongoing depreciation, the firm has initiated steps to reverse its longstanding bets against the currency. The decision reflects a measured approach to align with the evolving economic landscape.
Strategic Reversal of Underweight Position: Sergei Strigo, Co-Head of Emerging Markets Fixed Income at Amundi, mentioned, “We have started to cover our underweight in Turkish lira a few weeks ago.” This reversal indicates a shift toward a more positive outlook on the Turkish currency.
Optimism Following Interest Rate Hike: The recent 500 basis-point interest rate hike in Turkey, bringing rates to 40%, has been viewed positively by Amundi. Strigo considers this move as a strong signal of Turkey’s commitment to addressing its inflation challenges.
Cautious Approach Despite Positive Indicators: While expressing optimism, Amundi remains prudent and is not immediately increasing its allocation in the lira. Strigo emphasized that the currency remains on their radar screen, suggesting a watchful and strategic approach.
This move by Amundi reflects the dynamic nature of investment strategies in response to changing economic conditions, emphasizing a balance between optimism and caution in the financial landscape.