Turkey: Turkish lira continues to weaken, hits new record low
March 4, 2015
The Turkish lira (TRY) continued its downward slide in March, weakening sharply against the U.S. dollar. On 3 March, the TRY reached a new all-time low against the greenback, ending the day at 2.54 TRY per USD. This was 5.6% weaker than the level observed on the same day of the previous month. On an annual basis, the Turkish lira lost 8.6% against the dollar.
The TRY’s recent weakening came on the back of rising fear of an excessive loosening in monetary policy despite rising inflation. President Recep Tayyip Erdogan has been highly critical of the Central Bank’s monetary policy decisions and has been advocating a lower interest rate to boost growth. Erdogan’s criticism has sparked fears that the government could exert further pressure on the Central Bank and threaten its independence. In addition, a strengthening U.S. dollar has accelerated the lira’s slide.