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Turkey's central bank raises forecast for exchange rate

14 February 2017 12:01 (UTC+04:00)
Turkey's central bank raises forecast for exchange rate

By Kamila Aliyeva

The Central Bank of Turkey raised its forecast for the exchange rate of the U.S. dollar to Turkish national currency, the lira.

The Bank announced that the ratio will reach the level of 3.8807 liras to the dollar by late 2017.

Earlier, the Turkish Central Bank's forecast was at 3.8619 liras to the dollar.

The CBT also forecasts inflation at 8.87 percent for 2017. Earlier it was reported that CBT has increased inflation forecast for the country from 6.5 percent to 8 percent for 2017.

The exchange rate of the Turkish lira on January 12 hit the minimum since 2005, reaching a level of 3.9004 liras to the dollar when the denomination of the national currency was held.

Some experts link the rise in the price of U.S. currency against lira with the ineffective actions of the government to ensure the balance of the course.

The U.S. dollar has been steadily gaining value against the Turkey’s lira since mid-August 2016 due to growing security concerns after the terror attacks, as well as consideration of certain amendments to the Constitution.

The Turkish 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.

Along with many other emerging market currencies, Turkey's lira has fallen considerably since the November election of Donald Trump as U.S. President due to the fears that global trade will be affected.

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Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva

Follow us on Twitter @AzerNewsAz

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