The Turkish lira is declining to a new record level after the failure of the interventions of the “Turkish Central” by Alborsanews

0
103



© Reuters. “Bloomberg”: the Turkish lira is falling to a new record after the failure of the “Turkish Central” interventions

It retreated during Thursday’s trading to its lowest level against the US dollar since last May, after the central bank’s attempts to intervene in the money market failed to reassure investors.

According to a report published by “Bloomberg” news agency, the value of the Turkish currency has eroded by about 2.55% to 7.2271 against the dollar, becoming the biggest loser in emerging market currencies, and the cost of insurance against defaults on government bonds increased to the highest level in three months, and on the stock exchange, an index lost The main shares were 4.8%, being the worst among the stock markets in developing countries.

The agency concerned with global economic affairs stated that the basis of the turmoil in the lira is due to concerns about the level of Turkey’s foreign exchange reserves, and a strong wave of interest rate cuts, which led to an influx of foreign capital abroad.

And “Bloomberg” stated that Turkish officials exert pressure on state-owned banks to support the lira by increasing dollar sales, instead of raising interest rates or curbing the supply of credit.

The Turkish central bank had cut interest rates nine times in a row by a total of 1.575 basis points since July 2019 before stopping for two months so far, and in the meantime, banks provided credit incentives and policymakers pumped more liquidity through the issuance of government bonds.

Experts of “Goldman Sachs” and “Oxford Economics” believe that there is an opportunity to raise interest soon, as the official borrowing costs in Turkey are among the lowest in the world, and have been less than zero throughout the year.

The Turkish Central Bank, in its last meeting on July 23, had kept interest rates steady at 8.25% for the second month in a row after an easing cycle that lasted for about a year, after reducing them from a level of 24%.

Source: A.C.A.

Clarify the risks: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn’t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





LEAVE A REPLY

Please enter your comment!
Please enter your name here