The current market bias for the CHF to TRY exchange rate is range-bound.
Key drivers include an interest rate differential where the Swiss National Bank has recently reduced rates to counter easing inflation, while the Central Bank of Turkey is expected to further cut its policy rate due to moderating inflation expectations. Additionally, the recent imposition of tariffs on Swiss exports has pressured the Swiss economy, contributing to the franc's current stability against the lira.
In the near term, the exchange rate is expected to remain within a stable range, reflecting its recent performance with only slight fluctuations.
An upside risk could arise from potential intervention by the Swiss National Bank to manage the strength of the franc if inflation trends change. In contrast, a downside risk might stem from worsening economic conditions in Turkey, possibly exacerbated by external debt pressures and continued depreciation of the lira.
