Unscientific lira poll
I know not very scientific (at all) but I ran two Twitter polls asking people where they saw the lira on an Erdogan win scenario and then an opposition win.
https://twitter.com/tashecon/status/1647292421846302720?s=61&t=wYv4c8R2e5qI1ZTyZPsQiw
https://twitter.com/tashecon/status/1647292138944593920?s=61&t=wYv4c8R2e5qI1ZTyZPsQiw
Notable that more than twice the number responded to the Erdogan poll, which might suggest biases therein. I guess my Twitter account is followed by more foreign speaking opposition types - who have an interest in being downbeat on Erdogan. That said, why would they not vote on the opposition poll, and talk that up? Maybe it’s just harder to call the lira on an opposition win? An opposition win will likely see a feel good factor around policy normalisation and higher policy rates but then an understanding that a new CBRT team will need to buy FX in the market to close the large negative net international reserve position.
But the result are quite interesting even so.
Unsurprising given the unorthodox policy impulses of Erdogan people were much more bearish in an Erdogan win scenario, relative to an opposition win. But I think also interesting that in both scenarios people are generally bearish on the lira - maybe reflects a real sense of over-appreciation or just straight line forecasting and given a record of lira weakness.
Trying to normalise the results a bit by probabilities, generally people see the lira weaker by 28% overall, but 33% weaker under Erdogan and “just” 22% weaker under the opposition.
I think the market consensus at present is also generally that the lira is overvalued and needs to weaken whoever wins.