Monday, February 26, 2024

The Turkish lira fell against the dollar during the turbulent week … officials are optimistic


The Turkish lira fell 4% before seeing a partial recovery, and today, Tuesday, a day later it fell to record levels.

Financial market experts attribute the fall in the Turkish lira to the US dollar due to a series of concerns about Turkish President Recep Tayyip Erdogan’s new economic policy, “taking risks” and the possibility of lowering interest rates again this week.

The lira touched 14.4 against the dollar, recording 14.192 within 0605 GMT, before recovering some of its losses.

On Monday, the Turkish lira fell 7% to a record low of 15, reversing the trend after the central bank intervened for the fourth time in two weeks.

It comes just days before the scheduled meeting of the central bank’s monetary policy committee on interest rates next Thursday. According to an average Bloomberg survey of 19 analysts, the bank is expected to cut its key interest rate by 14 basis points to 14%.

The lira has lost about 50% of its value since the beginning of this year, due to significant monetary easing by the central bank, which has cut interest rates by 400 basis points since September, as stressed by Turkish President Recep Tayyip Erdogan.

According to indicators, the Turkish lira lost 29% of its value against the dollar in November as the central bank cut interest rates for the third month in a row.

Despite three interventions by the central bank in the exchange market in December, the Turkish lira has continued to perform poorly in recent days.

Thousands of Turks have been pushed to the poverty line as inflation has reached 21%, one of the highest rates in recent years.

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I saw the Turkish authorities

Turkish officials deny that inflation will continue for a long time, although the current rate of increase is 21% and there are no plans to raise interest rates, which is one of the key monetary instruments to combat inflation. , And they point out that inflation has become a global phenomenon as the rate in the United States has crossed 6.8%, the highest level in 39 years, as well as in the EU. Despite this not being the case in 25 years, it confirms the central bank’s monetary policy and ability to manage the target and inflation rates, thus reducing prices.

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

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