Currency crash in Turkey. Lira in free fall

Currency crash in Turkey.  Lira in free fall
Currency crash in Turkey.  Lira in free fall
/ Reuters

We have got used to the fact that the Turkish lira is weakening, but today its fall in value was exceptionally “spectacular”.

From 11.5 a.m. to over 1 p.m. in the early afternoon – this is the price of the US dollar in Turkish lira today. The weakening of the currency by a dozen or so percent in just one day is a “result” worth noting even in the case of money, which has been getting used to weakness and subsequent crashes for years.

In a broader horizon, it can be added that during the month USD / TRY increased by 39.3%, in three months by 58.4%, and from the beginning of the year by nearly 80%.

Update: USD / TRY after breaking the “13”, turned back towards 12.5 lira per dollar.

The reasons for the weakening of the Turkish currency are invariably the same – we described them extensively in the article “Erdogan’s central bank cuts interest rates again. Lira is depressing. ” In short: President Erdogan believes that high interest rates drive inflation, so in the face of a 20% pace of price growth, he orders the central bank to lower interest rates (and whoever does not comply with his requests loses his position). Erdogan also presented his controversial views yesterday, which was the direct reason for another sale of the lira. As reported by the Financial Times, Erdogan called the policy of lowering interest rates to fight inflation “the war for economic independence”.

The Turkish lira weakened even when the EUR / USD rate was stable; at present, the dollar is clearly strengthening, which increases the pressure on the currencies of emerging markets, which includes Turkey (next to Poland, among others). Yesterday, the US currency forces added information about the second term of Jerome Powell in the chair of the Federal Reserve chief.

The weakening of the lira is also clearly visible through the prism of the zloty, which has also been dramatically losing its value recently. 1 TRY currently costs PLN 0.315. A month ago it was 10 groszy more, and at the beginning of the year 20 grosz more than today. Even more impressive is the fact that a decade ago, 1 lira cost PLN 1.8.


About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

Check Also

Driver, have you not replaced your tires with winter ones yet? You don’t have to do this at all!

Winter tires are a nuisance for many drivers. Not only are we getting rid of …

Leave a Reply

Your email address will not be published. Required fields are marked *