Higher rates not helping Turkish lira as it slides towards new record lows

By bne IntelliNews November 25, 2016

The Turkish lira hit to a new historic low of 3.4768 against the US dollar in early trading hours of November 25, a day after the central bank decided to raise its policy rates for the first in nearly three years.

The bank was hoping the move will support the battered currency but the breather was only short-lived and the lira's advance faded away within hours of the decision to boost borrowing costs. Additionally, EU parliament voted overwelmingly on a resolution calling for the end of accession talks with Turkey in response to Ankara's post-coup crackdown on dissent.

The lira was trading at 3.4456 against the dollar as of 19:03 Istanbul time on November 25, up 0.02% d/d. Turkish stocks were up by 0.23% on the day.

Worsening economic outlook following the July 15 coup attempt, along with domestic political risks, as well as tension with European Union and FED’s expected rate hike in December are weighing heavily on confidence taking their toll on the nation's currency. Meanwhile, security threats never deescalate in the country over Syria and Iraq policies as well as Kurdish policy.

Related Articles

Turkish banking industry's likely 2017 profit growth seen at 15-20%

This year's growth in the profits of Turkish banks is expected to be between 15% and 20%, Huseyin Aydin, head of The Banks Association of Turkey (TBB), told media on August 8. Turkish lenders’ ... more

China to finance 88% of Tehran-Mashhad railway electrification costing up to $2bn

China is to finance as much as 88% of the $1.5-2bn project for the electrification of a 1,000km high-speed rail route connecting the Iranian capital of Tehran and second city Mashhad, Iran Labour ... more

Azerbaijan's central bank keeps key rate unchanged at 15%

Azerbaijan's central bank has kept its key rate unchanged at 15% following its monetary policy meeting on August 1, the regulator reported. The justification for its decision, it said, is ... more

Dismiss