Exchange Rate in Turkey
Turkey - Exchange Rate
Lira slides to new record low amid rising geopolitical tensions
The Turkish lira traded at TRY 8.35 per USD on 30 October, which marked a 7.5% month-on-month depreciation and a new record low. Moreover, the currency was down 31.7% year-on-year and 28.7% year-to-date. The steep depreciation in recent weeks came on the back of rising geopolitical tensions in the region, dented investor confidence regarding the Central Bank’s policy and elevated inflation expectations.
Geopolitically, several disputes have weighed on the currency. Most recently, President Erdogan urged Turks to boycott French products following the French president’s remarks on Islam in the wake of the murder of a French teacher. Moreover, investors worry over greater Turkish intervention in the Azerbaijan-Armenia territorial dispute, among other regional conflicts, such as in Libya and Syria. Other points of concern are Turkey’s strained relationship with the United States following the purchase and testing of a Russian defense system, and lingering tensions with the European Union due to Turkey’s actions in the Mediterranean. Economically, investor confidence in the Central Bank has been dented by the Bank’s decision to hold fire in its most recent meeting, which went markedly against analysts’ expectations. On top of that, the Bank raised its inflation forecast from 8.9% to 12.1% by year-end.
Looking ahead, the lira is expected to remain under severe pressure against the USD through next year amid lingering geopolitical tensions, unorthodox economic policy, elevated price pressures and low real interest rates, as well as eroded institutional independence. Moreover, a twin deficit and continued uncertainty surrounding the evolution of the pandemic cloud the outlook, while the U.S. elections raise further questions over Turkey’s future relationship with the superpower.
FocusEconomics panelists are pessimistic on the lira’s outlook, with the panel forecasting the TRY to end 2021 at 8.20 per USD. In 2022, the lira is not expected to perform much better, ending the year at 8.37 per USD.
Turkey - Exchange Rate Data
|Exchange Rate (vs USD)||2.92||3.53||3.79||5.29||5.95|
5 years of economic forecasts for more than 30 economic indicators.
Turkey Exchange Rate Chart
Source: Thomson Reuters.
|Bond Yield||12.00||-0.09 %||Dec 31|
|Exchange Rate||5.95||-0.85 %||Jan 01|
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April 6, 2021
Consumer prices increased 1.08% from the previous month in March, picking up from February's 0.91% increase.
April 1, 2021
The Istanbul Chamber of Industry Turkey Purchasing Managers’ Index (PMI) rose to 52.6 in March from 51.7 in February.
March 26, 2021
Business confidence in Turkey rose to a near three-year high 110.8 in March from 109.3 in February.
March 24, 2021
Consumer confidence rose to a multi-year high of 86.7 in March from 84.5 in February; however, the index remained markedly below the neutral 100-threshold that separates pessimism from optimism among consumers. The uptick was driven by a broad-based improvement with views on the current financial situation and the expected financial situation in the year ahead turning less downbeat, while attitudes towards the general economic situation over the next 12 months and likelihood of spending also improved.
March 18, 2021
At its 18 March meeting, the Monetary Policy Committee of the Central Bank of Turkey raised the one-week repo rate by 200 basis points from 17.00% to 19.00%.