HSBC Asset Management highlights that recent domestic political uncertainty and rising oil prices, stemming from conflict in the Middle East, have increased volatility in Turkish asset markets and pressured the country's reserves, given Türkiye's status as a significant net oil importer [1]. Despite these challenges, the MSCI Türkiye Index has performed well, demonstrating market resilience supported by healthy international reserves and a managed float of the lira [1].
HSBC attributes this resilience to two main factors: the surge in gold prices in recent years has helped maintain sufficiently healthy international reserves, which in turn supports the lira and limits its depreciation [1]. Additionally, Türkiye's policymakers have maintained discipline, with the central bank (CBRT) adopting an orthodox stance since May 2023. This approach has focused on taming inflation through high interest rates, and has remained steady despite domestic political developments [1].
HSBC views Türkiye as an example of how emerging market economies are showing increased resilience, with policy discipline and reserve management acting as key anchors for stability in the face of external and internal pressures [1].
CONCLUSION
HSBC Asset Management sees Türkiye's market resilience as rooted in disciplined policy and healthy reserves, despite volatility from political uncertainty and higher oil prices. The central bank's orthodox approach and managed lira float have helped limit depreciation and support asset performance. Overall, Türkiye stands out among emerging markets for its ability to withstand recent challenges.