• tl

Turkish lira record fall doesn’t seems to slow down

Consumer prices are rising as economy contracts

 

Turkey’s lira continues to fall and there does not seem to be a bottom for that well. The drop, however, creates another side-effect: the rising inflation…

 

The currency dropped 1.5 per cent to TL3.59 against the dollar only last Thursday and on Tuesday it reached TL3,78. Against the Euro it dropped to TL4,01…

 

The currency fell 17% in 2016, making it the second-worst performance among emerging market currencies after the Argentine peso.

 

The failed coup last summer, the security challenges both inside the cities and in the southern provinces along with the Syrian crisis played a significant role for this poor performance of the Turkish currency.

 

Turkey’s economy has gone into sharp reverse, with gross domestic product retreating from a 4.5 per cent increase in the first half of 2016 to a contraction of 1.8 per cent in the third quarter.

 

According to experts, if Turkey wants to avoid inflation expectations from deteriorating significantly, it is crucial to stabilize the lira.

 

Turkey’s economy is in crisis and the limited independence of the Central Bank is not helping things.