23.06.2023, 10:59
The Turkish lira has collapsed to a historic low
Source: OREANDA-NEWS
OREANDA-NEWS During trading on the international Forex market, the exchange rate of the national currency of Turkey has updated a new anti-record against the dollar. At the top point, the dollar/lira pair exceeded the 25 lira mark and reached a historical maximum of 25.468 lira, according to the site data.
By the close of trading on June 22, the currency had added more than two percent. As of 10:12 Moscow time, the exchange rate has adjusted to 25.08 lira per dollar.
The Turkish currency set the previous record a day earlier. The collapse of the exchange rate occurred against the background of the decision of the Turkish Central Bank to raise the key rate from 8.5 to 15 percent, while analysts expected a sharper increase, up to 40 percent. The market was hoping for a departure from the orthodox monetary policy, which is adhered to by the current president Recep Tayyip Erdogan, after Hafiz Gaye Erkan took over as head of the regulator. The economist had extensive experience working in Western banks. The Turkish President adhered to the idea that lowering the key rate would improve lending to industry, which means that it would eventually lead to a strengthening of the lira and lower inflation. In fact, over the past ten years, the lira has become the worst currency in the world, with the exception of the Venezuelan bolivar — during this period it has depreciated 12 times.
By the close of trading on June 22, the currency had added more than two percent. As of 10:12 Moscow time, the exchange rate has adjusted to 25.08 lira per dollar.
The Turkish currency set the previous record a day earlier. The collapse of the exchange rate occurred against the background of the decision of the Turkish Central Bank to raise the key rate from 8.5 to 15 percent, while analysts expected a sharper increase, up to 40 percent. The market was hoping for a departure from the orthodox monetary policy, which is adhered to by the current president Recep Tayyip Erdogan, after Hafiz Gaye Erkan took over as head of the regulator. The economist had extensive experience working in Western banks. The Turkish President adhered to the idea that lowering the key rate would improve lending to industry, which means that it would eventually lead to a strengthening of the lira and lower inflation. In fact, over the past ten years, the lira has become the worst currency in the world, with the exception of the Venezuelan bolivar — during this period it has depreciated 12 times.
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