Forex News

Lira Sinks to 17 Per Dollar as Erdogan Rate Talk Fuels Forex Demand

2022.06.08 12:31

Lira Sinks to 17 Per Dollar as Erdogan Rate Talk Fuels Forex Demand
© Bloomberg. An electronic board displays exchange rates information at a currency exchange bureau in Istanbul, Turkey, on Thursday, April 21, 2022. Turkish inflation soared to a fresh two-decade high in March, leaving the lira increasingly vulnerable by depriving the currency of a buffer against market selloffs.

(Bloomberg) — Turkey’s lira tumbled beyond 17 per dollar for the first time since December amid a rush for foreign currency that was sparked this week after President Recep Tayyip Erdogan ruled out higher rates despite soaring inflation.

The lira fell as much as 2% to 17.1048 per dollar on Wednesday, extending its losses this year to 22%, the worst performance in emerging markets. It’s declining for a 10th consecutive year as Erdogan’s insistence on lower rates keeps monetary policy too loose to contain inflation running at the fastest pace since 1998.

The slide deepened this week, heading for the worst losses since March 11, as Erdogan vowed not to allow monetary tightening and in fact, promised rate cuts in his speech. The nation’s companies stepped up foreign-exchange purchases in response, according to traders who asked not to be identified because they’re not authorized to speak publicly.

“Erdogan’s comments are nothing new, but with inflation at 73% year-on-year, his comments give the situation a pretty surreal quality,” said Peter Kinsella, the head of currency strategy at Union Bancaire Privee UBP. “Further weakness is inevitable, just reflecting the usual issues — massive inflation, high levels of credit growth and a consequent widening in the current-account deficit.”

The problem of monetary policy lagging inflation has troubled Turkey at least since 2016, when Erdogan defeated a coup attempt. Over the past five meetings, the central bank has held policy rates at 14% even as consumer-price growth surged to 73.5% amid a global supply crunch. As a consequence, Turkey now has the world’s deepest negative policy rate when adjusted for inflation.

In another sign of investor unease, the nation’s credit-default swaps have jumped to the highest level since 2008. 

 

 

©2022 Bloomberg L.P.

Source

Related Articles

Leave a Reply

Back to top button
bitcoin
Bitcoin (BTC) $ 97,579.14 0.59%
ethereum
Ethereum (ETH) $ 3,484.36 5.29%
tether
Tether (USDT) $ 1.00 0.04%
solana
Solana (SOL) $ 248.60 0.87%
bnb
BNB (BNB) $ 656.22 0.87%
xrp
XRP (XRP) $ 1.43 5.68%
dogecoin
Dogecoin (DOGE) $ 0.417324 0.93%
usd-coin
USDC (USDC) $ 0.999497 0.01%
cardano
Cardano (ADA) $ 1.01 2.35%
staked-ether
Lido Staked Ether (STETH) $ 3,487.65 5.25%
avalanche-2
Avalanche (AVAX) $ 44.16 10.81%
tron
TRON (TRX) $ 0.205432 0.36%
the-open-network
Toncoin (TON) $ 6.16 2.43%
shiba-inu
Shiba Inu (SHIB) $ 0.000026 2.36%
wrapped-steth
Wrapped stETH (WSTETH) $ 4,122.12 4.63%
stellar
Stellar (XLM) $ 0.496396 3.88%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 97,359.09 0.57%
polkadot
Polkadot (DOT) $ 8.70 0.67%
chainlink
Chainlink (LINK) $ 18.45 11.19%
bitcoin-cash
Bitcoin Cash (BCH) $ 519.62 5.21%
weth
WETH (WETH) $ 3,482.99 5.07%
sui
Sui (SUI) $ 3.34 2.41%
pepe
Pepe (PEPE) $ 0.00002 1.02%
near
NEAR Protocol (NEAR) $ 6.74 6.73%
leo-token
LEO Token (LEO) $ 8.42 2.78%
litecoin
Litecoin (LTC) $ 96.56 1.45%
uniswap
Uniswap (UNI) $ 11.98 14.19%
aptos
Aptos (APT) $ 12.47 4.78%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,668.12 4.99%
internet-computer
Internet Computer (ICP) $ 12.26 14.00%
hedera-hashgraph
Hedera (HBAR) $ 0.140044 1.50%
usds
USDS (USDS) $ 0.999089 0.50%
crypto-com-chain
Cronos (CRO) $ 0.186573 0.69%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.588901 8.73%
ethereum-classic
Ethereum Classic (ETC) $ 30.98 10.81%
render-token
Render (RENDER) $ 7.82 4.85%
kaspa
Kaspa (KAS) $ 0.154348 4.26%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.12%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.48 2.30%
bittensor
Bittensor (TAO) $ 514.59 2.00%
arbitrum
Arbitrum (ARB) $ 0.90947 10.75%
whitebit
WhiteBIT Coin (WBT) $ 24.37 0.21%
dai
Dai (DAI) $ 0.999778 0.12%
bonk
Bonk (BONK) $ 0.000046 2.97%
vechain
VeChain (VET) $ 0.042263 3.43%
filecoin
Filecoin (FIL) $ 5.63 4.68%
dogwifcoin
dogwifhat (WIF) $ 3.36 8.23%
celestia
Celestia (TIA) $ 7.81 4.05%
cosmos
Cosmos Hub (ATOM) $ 8.47 0.13%
blockstack
Stacks (STX) $ 2.20 13.43%