February 8, 2023

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Turkish lira retreats after big gains last week |  Economic News

Turkish lira retreats after big gains last week | Economic News


The Turkish lira fell 6%, returning to its decline, today, Thursday, the fourth day after the big gains it made last week.

According to official figures, Finance Minister Noordin Napathy said the dollar balance of the Turks was declining and local hard currency reserves had reached a record high of $ 238.97 billion last week.

The central bank’s net international reserves – an effective buffer against the financial crisis – have fallen to their lowest level in nearly two decades.

The lira lost up to 20% in 4 trading sessions and recovered from more than 50% gain in the previous five days.

It comes in the wake of a new government plan to protect local deposits from losses caused by the devaluation of the lira against hard currencies.

Today, Thursday, the Turkish currency fell to 13.4 against the dollar, before the GMT rebounded to 13.5 at 4:30 pm and returned to 13.5.

Yesterday, Wednesday, the central bank confirmed that it will prioritize measures aimed at encouraging depositors to save in pounds by 2022.

The new Turkish financial instrument allows depositors to make potential profits, such as savings in foreign currencies, by holding assets in the Turkish lira.

Under pressure from successive central bank cuts in interest rates, the lira fell to previous record levels.

On December 20, the Turkish lira saw a significant recovery of over 33% to 12.2756 against the dollar, following reports by President Recep Tayyip Erdogan.

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Erdogan told a news conference – after presiding over a government meeting at the presidential palace in Ankara – that his country would launch a new financial instrument that would allow it to achieve the same level of potential profit for savings in foreign currencies by holding assets in the lira.

“We will provide new financial alternatives to our citizens who want to allay their fears of higher exchange rates,” he added.

“From now on, our citizens will not have to convert their savings from lira to foreign currencies for fear that exchange rates will rise,” he added.

Prior to the reports, the exchange rate of the Turkish lira against the dollar had reached 18.3674 and after the talk it fell to 12.2756.