The Turkish lira is at the lowest level ever.


Ankara (Turkish Zaman): The Turkish lira fell to its lowest level ever, Thursday, after data showed that annual inflation remained close to 12 percent and firmly exceeded the central bank’s expectations last month, which enhances the risks for an economy emerging from a bad decline caused by the Corona virus.

The Turkish currency, which amounted to 7,438 against the dollar, kept import prices high, and erased the impact of any downward pressure on prices resulting from the general isolation measures imposed earlier this year.

Adding to the risks to Turkey, new COVID-19 infections have soared in recent weeks. Consumer prices rose 11.77 percent in August, in line with the previous month, and slightly below the median forecast of 11.91 percent in a Reuters poll.

The Turkish Statistical Institute said that the monthly figure for the increase in consumer prices was 0.86 percent, compared to the poll’s expectations of a 1 percent increase.

Inflation is still high in the double digits since the beginning of this year, and the central bank hit the target of 5 percent last time in 2011.

The bank raised its year-end inflation forecast to 8.9 percent in July, betting that inflation will begin to decline as early as that month.

But few analysts expect that to happen soon, and a Reuters poll put inflation by the end of the year at 11 percent.

The largest increase in consumer prices for goods and services was 5.09 percent, the data revealed. Prices related to transportation, restaurants and hotels increased, while prices for clothing and shoes decreased.

The Turkish currency fell about 20 percent from the beginning of this year, but it has stabilized in recent weeks. The devaluation of the currency increased inflation through imports, which in turn led to a high current account deficit.

The Turkish lira fell 0.6 percent to 7,434 against the dollar by 0935 GMT.


Please enter your comment!
Please enter your name here