Turkey: Turkish lira recovers in January
January 31, 2012
On 31 January, the Turkish lira (TRY) traded at 1.78 per USD, which was 5.7% stronger than the level recorded on the last day of the previous month. The figure contrasted the 3.0% depreciation recorded in December. Nevertheless, on an annual basis, the currency remains 10.8% weaker than in the same month last year. The Turkish lira has advanced on speculation that a deal between Greece and international investors will increase appetite for assets in emerging markets. In addition, the TRY has also been buttressed after central bank governor Erdem Basci stated that monetary authorities will support an appreciation of the currency this year, and will not intervene unless it begins to threaten financial stability. Owing to the recent appreciation of the lira, the Central Bank has announced that it will end its daily foreign exchange auctions, and will only be conducting auctions when needed. The Bank's decision comes at a time when improving investors' sentiment and stronger capital inflows are providing some support for the currency, so it is not expected to have significant effects on the FX market.