Connect with us


Turkey’s Lira Sinks To Near Record Lows As Erdogan Wins Re-Election



Turkey's Lira Sinks To Near Record Lows As Erdogan Wins Re-Election

(CTN News) – During Monday’s session, the Turkish lira plummeted as incumbent President Recep Tayyip Erdogan secured victory in the 2023 election, extending his rule into a third decade in power.

Earlier in the session, the currency slipped to 20 to the dollar as of Monday morning at 4 a.m. London time, after earlier in the session it had slipped to a level of 20 to the dollar.

We have a pretty pessimistic view of the Turkish Lira as a result of Erdogan retaining power after the election, Wells Fargo’s Emerging Markets Economist and FX Strategist Brendan McKenna told CNBC’s “Squawk Box Asia” earlier this year.

According to McKenna, the lira will reach a new record low of 23 against the dollar by the end of the second quarter, and then reach 25 as early as next year.

During the last five years, the value of the currency has declined by about 77% against the dollar. In his opinion, Turkey’s unorthodox monetary and economic policy frameworks are likely to remain in place for the foreseeable future.

As for monetary policy, Turkey’s Lira monetary policy focuses more on growth and export competition than it does on taming inflation, and Erdogan supports the unconventional view that raising interest rates leads to inflation because it increases a country’s ability to export.

The current setup is just not sustainable, according to Timothy Ash, Senior EM Sovereign Strategist at BlueBay Asset Management, in an e-mail interview.

As a result of limited foreign exchange reserves and massively negative real interest rates, the pressure on the Turkish Lira is high,” Ash added.

It is expected that the Istanbul stock exchange will open at 7 a.m. on the London time zone.

As McKenna pointed out, the outlook for the Turkish economy and markets is very bleak.

There was a silver lining to be found in the whole scenario as the Turkish Lira central bank was able to secure currency reserve swap lines with countries in the Middle East and China, according to the expert.

In the case if they are able to continue drawing on those lines and possibly extend and enhance those reserve currency lines, then maybe there will be some support in the FX intervention of the central bank,” he added.


Amazon Defers Campus Hire Offer Letters Until Next Year

Continue Reading

CTN News App

CTN News App

Recent News


compras monedas fc 24

Volunteering at Soi Dog

Find a Job

Jooble jobs