Turkey: Lira tumbles in January
February 6, 2017
The Turkish lira (TRY) has weakened significantly in the past month. On 27 January, the currency closed the trading day at 3.88 TRY per USD. This was a 10.1% depreciation over the same day of the previous month and a 29.2% depreciation on a yearly basis. The currency has lost 9.9% of its value so far this year.
The weakening of the lira in the past month comes amid myriad domestic troubles. The currency tumbled after Fitch Ratings downgraded Turkey’s credit rating to “junk” grade last month, stripping the country of its last remaining investment grade status. The agency cited the unstable political and security environment as the main reason behind the revision. The currency has also suffered following the failed coup in July last year and President Recep Tayyip Erdogan’s push for more executive power.
Author: Dirina Mançellari, Senior Economist