Tuesday, February 27, 2024

The bleeding of the Turkish currency continues.. The dollar is approaching 18 lira

Date:

The Turkish lira fell again in Monday’s trade, hitting its lowest level since last December.

The Turkish lira is trading near its all-time low, especially since the big fall on December 20, when the price fell to 18.4 lira per dollar.

The Turkish lira traded at 17.8600 against the dollar, down 0.65 percent from the previous close.

It came after the Turkish central bank released manufacturing confidence index data for July, which showed the index fell to 103.7% from 106.4% in the previous month in June, leading to a decline of more than 2.5%. Impact on the exchange rate of the lira.

The current data on the Manufacturing Confidence Index is the lowest in two years since the July 2020 data, when the index registered 100.7 points, compared to 92.6 points in the previous month.

The lira fell more than 7 percent during trading this July, coinciding with a seventh set of interest rates by the Turkish central bank.

Last week, the Turkish Central Bank released its interest rate decision, with the interest rate set at 14%.

The Turkish central bank’s decision came within two days of Turkish President Recep Tayyip Erdogan’s statements regarding the country’s commitment to a low-interest policy and described inflation rates recorded in Turkey as unjustified.

Turkey’s central bank said it will continue to use all the tools at its disposal with determination until strong signs of a permanent decline in inflation and a medium-term target emerge, in line with the key objective of price stability. 5%.

In December 2021, the Turkish lira fell to its lowest level when inflation data was announced, reaching its highest level in 20 years when it exceeded 36%, while inflation today is over 78%.

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The continued stabilization streak comes after the Turkish central bank cut interest rates by 500 basis points in 4 consecutive meetings from September to December 2021.

The Turkish central bank last year cut interest rates for the first time in 2021 by 100 basis points in September, followed by a larger cut of 200 basis points in October, and then two more cuts of 100 basis points in November and December.

As a result of these cuts, the Turkish lira fell, which coincided with the ignition of inflation rates in the country, from close to 7.5 liras to the dollar in December 2021 to close to 18.5 liras to the dollar.

Nadia Barnett
Nadia Barnett
"Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator."

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