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Turkish lira weakens to record

9 January 2017 17:31 (UTC+04:00)
Turkish lira weakens to record

By Nigar Abbasova

The value of the Turkish currency, lira, has crashed to a record low against the U.S. dollar due to growing security concerns after the terror attacks, as well as consideration of certain amendments to the Constitution, Trend reported.

The currency of the $720 billion Turkish economy lost as much as 1.14 percent per dollar to record 3.6870 on January 9, renewing its all-time bottom-line record of 2005. The previous lowest level was seen on January 6 at 3.6474 per dollar.

The lira also weakened against the euro settling at 1.8759 liras.

Consumer prices climbed 8.5 percent in December compared to the same month in the previous year and also by 8.5 percent for the entire past year.

The currency crisis occurred following a series of events, including the European Parliament voting to suspend talks with Turkey on EU membership, as well as the tense situation within the country. President Recep Tayyip Erdogan earlier urged Turks to convert their foreign money into gold and lira to stimulate the economy of the country letting the lira and gold win greater value.

At its December 20 monetary policy meeting, the Central Bank of Turkey (CBRT) decided to leave the marginal funding rate unchanged. The main rates — overnight lending, overnight borrowing and the one-week benchmark repo rate — were kept at 8.5 percent, 7.25 percent and 8 percent, respectively.

Following the decision to keep the rates steady, President Erdogan renewed his call for lowering interest rates claiming that “there is no other remedy” and pointing to the United States, Japan and Europe as examples of economies where rates are low.

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

Follow us on Twitter @AzerNewsAz

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