Turkish lira near all-time low
The Turkish lira fell to an all-time low on Wednesday over fears of an unexpected rate cut.
On Wednesday morning, the Turkish currency fell below the level of 8.9 against the dollar.
The Turkish lira is close to the all-time low it reached last week, Reuters reported.
By contrast, the dollar’s exchange rate rose, bolstered by concerns about global inflation and the expected tightening of the US Federal Reserve, the US Central Bank.
“At 6:10 a.m. GMT, the Turkish lira reached 8.9250, approaching an all-time low of 8.9490 on 29 September, amid concerns over President Recep Tayyip Erdogan’s impact on monetary policy.”
“In late September, the Turkish lira came under pressure, falling to its lowest level in three months against the dollar and losing more than 16 percent since the beginning of the year.”
Economists at the time attributed the Turkish currency’s fall to a 100-basis-point interest-rate cut that offered a long-sought stimulus despite inflation reaching 19.25 percent last month, according to Reuters.
The Turkish economy is facing a crisis of investor mistrust due to disagreement over the central bank’s operation mechanism, which led to increased pressure on the lira and a price hike that pushed inflation to 19.25%, the second highest rate in the G-20.
