August 8, 2022

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The Turkish lira returns to its sharp decline after a brief recovery

The Turkish lira returns to its sharp decline after a brief recovery

The Turkish lira returns to its sharp decline after a brief recovery

Driven by inflation data and the dimming effect of government subsidies

Friday – 9th Al-Hijjah 1443 Hijri – 08 July 2022 AD Issue no. [
15928]

The Turkish lira fell to 17.24 lira against the dollar in Thursday trading (Reuters).

Ankara: Abdel Razek said

The Turkish lira returned strongly to its losing streak after a brief rally led by government support that faded after the release of inflation data for June (June).
The Turkish lira fell to 17.24 lira to the dollar in Thursday trade, its lowest level since June 24, when Turkish authorities decided to curb corporate borrowing, bringing the lira to 16.37 lira. to the dollar, from 17.32 lira to the dollar.
And the Banking Regulatory and Supervisory Authority in Turkey intervened in a new attempt to save the lira, which recorded the worst position among emerging market currencies, by barring companies with foreign currency assets of more than 15 million and foreign currency assets of more than 10% of their total assets from taking out new loans in the local currency.
The Turkish lira has now touched its lowest historical level recorded on December 20, at 18.4 lira to the dollar, after inflation rose to 36 percent at the time, and last June it recorded 78.62 percent year-on-year, the highest level of inflation. Since 1998.
The Turkish lira lost 44 percent of its value last year and 26 percent of its value since the start of the year. Traders in Turkish markets are awaiting the implementation of a package of new structural measures announced by Turkish Finance Minister Nuredin Nefti after inflation data was announced on July 4, and after government rescue efforts, most recently an additional increase to the minimum wage, failed.
Turkish President Recep Tayyip Erdogan insists on lowering interest rates, which he considers the root of all evil and the cause of high inflation, contrary to accepted economic principles, with the aim of encouraging increased production and exports.
The trade deficit widened 184.3 percent year-on-year to $8.16 billion in June, with energy import costs continuing to rise, contributing to the widening deficit.
The trade deficit in the first half of the year was $51.37 billion, a year-on-year increase of 142.5 percent.
Two days ago, the Turkish Minister of Treasury and Finance, Nuredin Nefti, announced the continuation of efforts that represent the government’s main priority in the context of fighting inflation. Including 11 measures taken by the government in the wake of the huge inflation wave the country is experiencing.
And the agency “Standard & Poor’s” international credit ratings warned that inflation related to the weak value of the Turkish lira will continue to affect consumer spending, with the annual inflation rate expected to remain above 70 percent until the end. This year, and by more than 20 percent by the end of this year, and by the middle of next year, the Russian war in Ukraine and slowing growth in the Eurozone and the United Kingdom will affect Turkish exports, which have been the most important growth drivers for Turkey until recently.

Turkey

Economy of Turkey

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