Duvar English – Reuters
The Turkish Lira observed a new record low against the dollar on Sept. 23, trading for 7.684 liras on the unit by 10 a.m. and surpassing the highest level from the day before, which was 7.682 liras on the dollar.
Turkey’s lira hit a new record low against a firmer dollar yesterday as investors weighed whether the central bank would hike rates at its meeting on Sept. 24 to stem the decline.
While most economists in a Reuters poll did not expect the central bank to formally hike its policy rate, they predicted it would continue backdoor steps to tighten money supply.
Meanwhile, the lira traded for 8.98 liras per Euro on Sept. 23 and 9.76 liras per pound sterlin.
Gold prices fell marginally to 468 liras per gram, and $1,885 an ounce.
The Turkish Lira’s seemingly unstoppable decline against foreign currency has resisted all currency interventions by Ankara for about a month, resulting in a credit rate downgrade by Moody’s.
Turkish economist and Duvar English columnist Uğur Gürses said that the main reason behind the lira’s fluctuations was a distrust for Turkey’s economy on the part of domestic and foreign investors.
“The reason for the dollar exchange rate’s increase is distrust for the economy. The Central Bank has been hiking interest rates for funding for about a month, but nobody will go toward the lira,” Gürses said.
The economist noted that the hike in dollar prices will eventually be reflected in consumer goods’ price levels, and in turn, inflation.