While not its base case, the Wall Street bank said problems could be triggered if savers and firms became worried that a shift to more orthodox economic policies under a new government would fuel short-term FX market turbulence.
"The current market uncertainty poses significant risks, in our view," Goldman said in a research note published on Wednesday. Authorities could offer local banks FX swaps and try to reassure those with money deposited in the depreciation-protected bank accounts introduced in 2021 to stop the lira's plunge that year, but these measures may not work.
"Given the short-term nature of the instruments, time is unlikely to be on the authorities’ side," Goldman's analysts said. "Hence, we believe there will need to be interim solutions".
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