#IGForexChat: What does the next year hold for emerging market currencies?

Is Turkey going against its pledge to balance the economy?

Victoria Scholar: Tax cuts in Turkey have been putting pressure on its lira amid concerns about its fiscal position. Raj, what’s your view? Do these tax cuts go against Turkey’s finance minister, Berat Albayrak’s, pledge to balance the economy?

Raj Dhall (11 min 27 sec): I think it’s a very difficult situation with the central bank versus the government and I think the tax cuts are causing problems. Does it feel like it’s a good thing to do right now? My answer’s no. I don’t think tax cuts are the way forward, I think that’s slightly irresponsible.

Paul Bratby: It also shows desperation.

Raj Dhall: Desperation as well, you could look at it like that. On the other side of things, having 24% inflation is crazy. We’re not used to seeing or feeling anything like that in this country and the prices on goods like food and oil aren’t sustainable for the people. They have to be seen to be doing something so that they can stay in power.

Following the recent upward trend, is the Brazilian real one to watch following the campaign of president-elect Bolsonaro?

Paul Bratby (16 min 49 sec): Well I think the trend [a 5% rise against the US dollar in October 2018] is over now. Following the election, it has pulled back quite dramatically. The election acted as a catalyst but all of a sudden that bullish trend is over, and we could be in a bearish correction.

Get more insights from the #IGForexChat

If you’d like to find out more about what the coming 12 months hold for the emerging currencies market, watch the full interview, or choose an area that interests you:

• Is current emerging market currency volatility a warning sign or an opportunity? (1 min 41 sec)
• How do you handle the challenges of trading forex in a basket? (3 min 2 sec)
• Is the return to the greenback responsible for the current volatility in the emerging currencies market? (4 min 55 sec)
• How could the US midterms affect EM currencies in the coming months? (6 min 20 sec)
• What damage could a flattened US yield curve do to EM currencies? (7 min 53 sec)
• What are the troubles currently facing the Turkish lira? (9 min 21 sec)
• Can the Turkish central bank truly be independent? (12 min 22 sec)
• How viable is the Turkish lira as a forex trade? (13 min 2 sec)
• Is the Brazilian real one to watch out for following president-elect Bolsonaro’s electoral victory? (16 min 46 sec)
• Following a bailout, is the Argentinian peso in ‘reprieve mode'? (19 min 55 sec)