Turkish lira plunges to fresh low ahead of anticipated interest rate cut
Shoppers shop in Istanbul, Turkey, December 5, 2021. Citizens’ purchasing power was affected by the depreciation in the Turkish lira.
NurPhoto by Getty Images | NurPhoto via Getty Images
Turkey’s currency was battered Monday, past fourteen. the dollarThis is ahead of investors’ expectations for rate cuts by the central bank, despite rising inflation.
It liraAccording to Reuters data, Istanbul’s currency traded at 14.33 dollars to the dollar at 12:25 p.m. – a slight increase from the 14.99 record earlier in the day. This marks the first occasion that the currency has been above 14 dollars.
The central bank of Turkey announced on Monday that it would directly intervene on the foreign exchange markets, buying dollars in order to stabilize the lira.
Turkish Finance Minister Nureddin Nebati said Monday the country is determined not to raise interest rates — in an echo of President Recep Tayyip Erdogan’s hardline stance against raising rates — which economists agree would actually aid the currency and rein in inflation, which is now near 20% in the country of 84 million.
Nebati stated that “we won’t increase the interest rate” and that it was possible to do so without increasing rates. He also said that he didn’t know when the central bank would cease monetary easing.