The Turkish lira held a record low of 18.8 per USD in January after the TCMB kept its interest rate at 9% during its latest meeting, as previously signaled. The decision marked the end of the central bank's loosening cycle, which began after President Tayyip Erdogan pressured the Monetary Policy Committee into 10 percentage points of unorthodox interest rate cuts starting from September 2021 to stimulate the economy's growth and exports. The move drove the lira to slide 29% in 2022 and trade 55% lower than levels before the rate-cutting path, causing more expensive energy imports to lift inflation as high as 86% in October. Also, the latest current account and goods trade deficits widened sharply, contradicting Erdogan's pledge that Turkey would consolidate a strong surplus position. Still, surveys by the central bank point to inflation expectations of 37.5% for the year ahead and 20.8% for 2024.

Turkish Lira Holds at Record-Low after Rate Decision

The Turkish lira has been changing hands around a record low of 18.7 per USD since October, ended 2022 down more than 40% against the greenback, and extending a 77% plunge in 2021 as the central bank continued its unorthodox rate-cutting policy through the year against a backdrop of soaring prices and trade imbalances. TCMB slashed its key rate by 1000 bps since September 2021 demanded by President Erdogan to stimulate growth in industry and exports. However, the CB paused the rate-cut cycle and left the one-week repo rate unchanged at 9% in December, saying that the current policy rate is sufficient and that it expects disinflation to start. Annual inflation rate fell to a 9-month low of 64.3 percent in December 2022, from 84.4% in November. Meanwhile, according to the November results of the Survey of Market Participants, inflation expectations increased for the short term by 0.13 points to 37.47% but decreased for the 2-year ahead period, by 0.41 points to 20.76%.

Turkish Lira Holds at Record Low

18.7 per USD since October, ending 2022 down more than 40% against the greenback, and extending a 77% plunge in 2021 as the central bank continued its unorthodox rate-cutting policy through the year against a backdrop of soaring prices and trade imbalances. TCMB slashed its key rate by 1000 bps since September 2021 demanded by President Erdogan to stimulate growth in industry and exports. However, the CB paused the rate-cut cycle and left the one-week repo rate unchanged at 9% in December, saying that the current policy rate is sufficient and that it expects disinflation to start. Annual inflation rate in Turkey slowed for the first time in 18 months to 84.4% in November, from 85.5% in October. Meanwhile, according to the November results of the Survey of Market Participants, inflation expectations increased for the short term by 0.13 points to 37.47% but decreased for the 2-year ahead period, by 0.41 points to 20.76%.

Turkish Lira Depreciated More Than 40% in 2022

The Turkish lira has been changing hands around 18.7 per USD since October, the lowest on record thanks to the central bank's unorthodox rate-cutting policy against a backdrop of soaring prices and trade imbalances. TCMB slashed its key rate by 1000 bps since September 2021 demanded by President Erdogan to stimulate growth in industry and exports. However, the central bank paused the rate-cut cycle and left the one-week repo rate unchanged at 9% in December, saying that the current policy rate is sufficient and that it expects disinflation to start. Annual inflation rate in Turkey slowed for the first time in 18 months to 84.4% in November, from 85.5% in October. Meanwhile, according to the November results of the Survey of Market Participants, inflation expectations increased for the short term by 0.13 points to 37.47% but decreased for the 2-year ahead period, by 0.41 points to 20.76%.

Turkish Lira Little Changed after Central Bank Decision

The Turkish lira has been changing hands at 18.6 per USD since October, the lowest on record thanks to the central bank's unorthodox rate-cutting policy against a backdrop of soaring prices and trade imbalances. TCMB slashed its key rate by 1000 bps since September 2021 demanded by President Erdogan to stimulate growth in industry and exports. However, the central bank is expected to end the rate-cut cycle this month and keep interest rates unchanged when it decides on monetary policy on Thursday. Annual inflation rate in Turkey slowed for the first time in 18 months to 84.4% in November, from 85.5% in October. According to the November results of the Survey of Market Participants, inflation expectations increased to for the short term by 0.13 points to 37.47% but decreased for the 2-year ahead period, by 0.41 points to 20.76%.

The Turkish lira has been changing hands at 18.6 per USD since October, the lowest on record thanks to the central bank's unorthodox rate-cutting policy against a backdrop of soaring prices and trade imbalances. TCMB slashed its key rate by 1000 bps since September 2021 demanded by President Erdogan to stimulate growth in industry and exports. The latest data showed annual inflation rate in Turkey slowed for the first time in 18 months to 84.4% in November, from 85.5% in October.

Turkish Lira Hovers at Record Low

The Turkish lira hovered at a record low past 18.6 per USD, after the central bank cut interest rates by another 150 bps in November, pushing borrowing costs to the lowest since August of 2020. The TCMB slashed its key rate by 1000 bps since September 2021 demanded by President Erdogan to stimulate growth in industry and exports. Yet, the bank signaled the November cut would be the end of its current rate-cutting cycle. The lira has plummeted more than 100% since the start of the bank’s cutting cycle and inflation hit a 24-year high of 85.5% in October, as the low purchasing power of the local currency exacerbated price pressure from surging energy costs that Turkey must import. Also, the latest current account deficit nearly tripled and the trade gap quadrupled from the corresponding periods of the previous year, contradicting Erdogan’s pledge that Turkey would consolidate a strong surplus position.

Turkish Lira Holds At Record-Low After Rate Cut

The Turkish lira extended its record-low past 18.6 per USD in early November, amid continued pressure from largely negative interest rates and trade imbalances. The TCMB slashed its key rate by 150bps in its October meeting, adding to the 850bps in rate cuts since September 2021 demanded by President Erdogan to stimulate growth in industry and exports. Consequently, the lira has plummeted 55% since the start of the bank’s cutting cycle and inflation hit a 24-year high of 85.5% in October, as the low purchasing power of the local currency exacerbated price pressure from surging energy costs that Turkey must import. Also, the latest current account deficit nearly tripled and the trade gap quadrupled from the corresponding periods of the previous year, contradicting Erdogan’s pledge that Turkey would consolidate a strong surplus position.

Turkish Lira Extends Record Low

The Turkish lira remained at the record-low of 18.6 per USD after the Turkish central bank slashed its interest rate by 150bps in its October meeting, surpassing estimates of a 100bps cut. The TCMB also signaled another cut by the same magnitude in its next meeting, the last in the rate-cutting cycle. The decision added to the 850bps in rate slashes since the start of the bank’s cutting-cycle in September of 2021, demanded by President Erdogan to stimulate growth in industry and exports. Consequently, the lira has plummeted 30% year-to-date and inflation hit a 24-year high of 83.5% in September, as the low purchasing power of the currency exacerbated price pressure from surging energy costs that Turkey must import. Also, the latest current account deficit widened to over 13 fold and the trade deficit tripled from the corresponding period of the previous year, contradicting Erdogan’s pledge that Turkey would consolidate a strong surplus position.

Turkish Lira Holds Record-Low After Rate Cut

The Turkish lira hovered at 18.6 per USD in October, remaining at a record-low despite efforts by the central bank to limit investors’ preference towards safer foreign currencies. The TCMB raised the ratio of bonds to be held and security maintenance for foreign exchange deposits, among other “liraization” measures implemented in the past year. The lira plummeted 30% year-to-date amid 700bps in policy rate cuts since September 2021, mandated by President Erdogan. On top of that, the president signaled further rate cuts are desired to stimulate growth and exports, even though inflation hit a fresh 24-year high of 83.5% in September, as the low purchasing power of the currency exacerbated price pressure from surging energy costs that Turkey must import. Also, the latest current account deficit widened to over 13 fold and the trade deficit tripled from the corresponding period of the previous year, contradicting Erdogan’s pledge that Turkey would consolidate a strong surplus position.

Turkish Lira Remains at Record Low

USDTRY increased to an all-time high of 18.856

Turkish Lira Hits All-time Low

The Turkish lira weakened to a record-low of 18.6 per USD In October, steadily extending losses since the start of the year amid a series of unorthodox rate cuts that keep real interest rates largely negative and a crippling balance of payments crisis. The Turkish central bank unexpectedly slashed its key interest rate by 100bps to 12%, adding to the 700bps in rate cuts that took place since the start of the loosening path in September 2021. On top of that, President Erdogan signaled further rate cuts are desired to stimulate growth and exports, even though inflation hit a fresh 24-year high of 83.5% in September, as the low purchasing power of the currency exacerbated price pressure from surging energy costs that Turkey must import. Also, the latest current account deficit widened to over 13 fold of the corresponding period of the previous year and trade deficit rose to a fresh record, contradicting Erdogan’s pledge that Turkey would consolidate a strong surplus position.

USDTRY increased to an all-time high of 18.555

USDTRY increased to an all-time high of 18.525

USDTRY increased to an all-time high of 18.468

The Turkish lira extended its decline to a record-low of 18.4 per USD in September after the central bank of Turkey unexpectedly slashed its key interest rate by 100bps to 12%, adding to the 700bps in rate cuts that took place since the start of cycle in September of 2021. Consequently, inflation in Turkey hit a 24-year high of 80.2% in August, as the low purchasing power of the currency exacerbated price pressure from surging energy costs that Turkey must import.

Turkish Lira Declines to Record-Low

The Turkish lira extended its decline to the 18.2 per USD level in late August, the weakest since hitting a record low of 18.4 in December of 2021 with pressure from largely negative borrowing costs. The central bank of Turkey unexpectedly slashed its key interest rate by 100bps to 13% in its last meeting, adding to the 600bps in rate cuts that took place since the start of cycle in September of 2021. Consequently, inflation in Turkey hit a 24-year high of 80% in July, as the low purchasing power of the currency exacerbated price pressure from surging energy costs that Turkey must import. The latest current account balance pointed to a deficit of $3.5 billion, tripling from the corresponding period of the previous year and contradicting Erdogan’s pledge that Turkey would consolidate a strong surplus position, while the latest trade deficit rose to a record high. Stabilization and harsh “liraization” measures by the central bank failed to support the lira.

Turkish Lira Declines Further

The Turkish lira plunged past 18.1 per USD in August, extending its decline to eight-month lows after the Turkish central bank unexpectedly slashed its key interest rate by 100bps to 13%. The decision added to the 600bps in total rate cuts that took place since the start of the cycle in September of 2021, sparking a currency crisis that pressured the lira to an all-time low of 18.4 in December. Consequently, inflation in Turkey hit a 24-year high of 80% in July, as the low purchasing power of the domestic currency exacerbated price pressure from surging energy costs that Turkey must import. Meanwhile, the latest current account figure pointed to a deficit of $3.5 billion, tripling from the corresponding period of the previous year and contradicting Erdogan’s pledge that Turkey would consolidate a strong current account surplus position. Stabilization and harsh “liraization” measures by the central bank failed to support the lira.

Turkish Lira Extends Plunge Following Rate Cut

The Turkish lira depreciated past 17.8 per USD in late July, extending its decline past seven-month lows amid large negative interest rates and soaring consumer prices. Despite no signs that consumer prices are close to decelerating, the central bank has held borrowing costs unchanged since President Erdogan backed 500bps of unorthodox rate cuts since September, sparking a currency crisis that pressured the lira to an all-time low of 18.4 in December. Consequently, inflation in Turkey hit a 24-year high of 79 percent in June amid soaring energy imports. Meanwhile, the latest current account figure pointed to a deficit of $6.5 billion and the export order index from the central bank tanked to a 15-month low, contradicting Erdogan’s pledge that Turkey would consolidate a strong current account surplus position. Stabilization and harsh “liraization” measures by the central bank failed to support the lira.

The Turkish lira was at 17.7 per USD after the central bank held its key rate at 14% in its July meeting, remaining at seven-month lows amid large negative interest rates and soaring consumer prices. Despite no signs that inflation will slow, the central bank has held borrowing costs unchanged since President Erdogan backed 500bps of unorthodox rate cuts since September, sparking a currency crisis that pressured the lira to an all-time low of 16.4 in December. Consequently, inflation in Turkey hit a 24-year high of 78 percent in June amid soaring energy imports. Meanwhile, the latest current account figure pointed to a deficit of $6.5 billion, contradicting Erdogan’s pledge that Turkey would consolidate a strong current account surplus position. Stabilization and harsh “liraization” measures by the central bank failed to support the lira.

Turkish Lira Retreats Further

The Turkish lira weakened to near 17.6 per USD, the lowest since the record of 18.4 hit December, pressured by soaring prices and large negative interest rates as investors await Thursday’s monetary policy decision. Despite no signs of slowing inflation, real interest rates remain largely negative as the TCMB held its benchmark rate constant since President Erdogan backed 500bps in rate cuts from September to December, sparking a currency crisis. Consequently, inflation in Turkey hit a 24-year high of 78 percent in June amid soaring energy imports. Meanwhile, the latest current account reading pointed to a deficit of $6.5 billion, contradicting Erdogan’s pledge that Turkey would consolidate a strong current account surplus position. Stabilization measures by the central bank and efforts to balance reserve levels, including a ban on new currency loans for foreign currency-heavy institutions, have failed to support the lira.

Turkish Lira at 7-Month Low

The Turkish lira weakened to the 17.3 per USD level, depreciating towards the record-low of 18.4 hit December as soaring inflation and largely negative interest rates exerted selling pressure on the currency. Annual inflation in Turkey was at a 24-year high of 78 percent in June, pressured by energy costs. Despite surging prices, real interest rates remain largely negative as the TCMB held its benchmark rate constant since President Erdogan backed 500bps in rate cuts since September. The latest current account reading pointed to a deficit of $6.5 billion, contradicting Erdogan’s pledge that Turkey would consolidate a strong current account surplus position.  Harsh stabilization measures by the central bank and efforts to balance reserve levels have done little to offset negative borrowing costs, as the lira already erased gains following banking regulator’s ban on new currency loans for foreign currency-heavy institutions.

Turkish Lira Slides to 1-Week Low

The Turkish lira weakened to near the 16.8 per USD level, depreciating from the three-week high of 16.1 touched on June 27 as fresh CPI data confirmed expectations that prices continued to accelerate. Annual inflation in Turkey rose to 79.6 percent, the highest in nearly 24 years, underpinned by a 150 percent surge in energy costs. The lira remains as the worst performing currency among emerging markets year-to-date, pressured by the world’s largest negative interest rates when considering inflation and steep current account deficits. The Turkish central bank left its interest rates unchanged in the last meeting, despite pledges by President Tayyip Erdogan’s pledge to continue slashing borrowing costs to resume the 500bps in interest rate cuts that took place between August and December of 2021. Harsh stabilization measures by the central bank and efforts to balance reserve levels have done little to offset negative borrowing costs.

Turkish Lira Continues to Weaken

The Turkish lira strengthened to 16.7 per USD, the highest in nearly three weeks after the Turkish banking regulator announced that banks would be banned from extending new local-currency loans if foreign exchange on their books is worth more than TRY 15 million and exceeds 10% of their total assets or annual revenues. The Lira remains the worst performer in emerging markets this year, as the country’s interest rates are the world’s most negative once inflation is taken into account. The Turkish Central Bank left its benchmark lending rate steady at 14% despite President Tayyip Erdogan’s pledge to continue slashing borrowing costs, while annual inflation hit a 20-year high of 73.5% in May. Harsh stabilization measures by the central bank and efforts to balance reserve levels have done little to offset negative borrowing costs.

Turkish Lira Strengthens Further to 3-Week High

The Turkish lira was steady at the 17.3 per USD mark, the lowest in six months, after the Turkish central bank held interest rates at 14% in its June 2022 meeting. The TCMB’s decision to hold rates came despite President Tayyip Erdogan’s pledge to continue slashing borrowing costs in a speech earlier in the month, which would add to the 500bps in rate cuts since August that pressured the lira to an all-time low of 18.4 in December. Largely negative interest rates assisted the lira to consolidate as the worst performing emerging market currency this year, dropping nearly 25% against the dollar. At the same time, surging energy and food costs lifted annual inflation to 73.5% in May, further pressuring the government’s fragile lira deposit protection scheme. Harsh stabilization measures by the central bank and efforts to balance reserve levels have done little to offset negative borrowing costs.

Turkish Lira Steady at 6-Month Low

The Turkish lira weakened past 17.1 per USD in the second week of June, dropping over 2% on Wednesday and edging closer to the all-time low of 18.4 hit in December, after President Tayyip Erdogan pledged to continue slashing interest rates. Such measures would add to the 500bps of rate cuts that took place since August of 2021, which pressured the lira to fall nearly 25% this year and consolidate as the worst performing emerging market currency. On top of that, soaring energy prices lifted annual inflation to a 23-year high of 73.5%, further pressuring the government’s fragile lira deposit protection scheme. The heavy downturn for the lira ensued despite harsh currency stabilization measures by the central bank throughout the first two quarters of the year, which failed to offset large negative interest rates and low reserve levels.

Turkish Lira Weakens on Fears of Rate Cuts

The Turkish lira weakened past 16.5 per USD in early June, edging closer to the all-time low of 18.4 hit in December as investors digested hot domestic price data. Soaring energy prices lifted annual inflation to a 23-year high of 73.5%, further pressuring the government’s fragile lira deposit protection scheme amid low reserve levels and large negative real interest rates. Despite harsh currency stabilization measures by the TCMB, the lira fell over 20% this year compared to the dollar, following 500bps in rate cuts by the central bank since August. In its latest effort to promote the “liraization” of the economy, the central bank plans to restrict domestic purchases of new lira bonds sold by foreign lenders. The measure adds to extended tax exemptions for corporations converting foreign currencies to the lira and an increased ratio of foreign currency that exporters are required to sell.

Turkish Lira Edges Closer to Record Low

The Turkish lira weakened further to 16.4 per USD in late May, edging closer to an all-time low of 18.4 hit in December, after the central bank left interest rates unchanged once again this month, despite inflation and recession worries. So far this year, the lira lost nearly 23% against the greenback, making it the worst performer in emerging markets, as the central bank continues with its ultra-loose monetary policy and as President Tayyip Erdogan has urged monetary easing to boost credit and exports. Still, soaring energy prices have been pushing the inflation higher, hitting a 20-year high of 70% in April and a fresh slide in the currency will likely pressure prices even higher.

Turkish Lira Extends Losses

The Turkish lira weakened further to 15.9 per USD in May, edging closer to the all-time low of 18.4 hit in December, as surging inflation and recession worries exerted selling pressure on the risky currency. Soaring energy prices lifted Turkey’s inflation rate to a 20-year high of 70% in April, further pressuring the government’s fragile lira deposit protection scheme amid low reserve levels and large negative real interest rates. Currency stabilization measures by the central bank failed to contain depreciation, as authorities imposed reserve requirements to ease lending and encourage conversion of foreign currencies to the lira. The moves follow ongoing revisions of the central bank’s policy framework to encourage the permanent “liraization” to the Turkish economy, including extending the tax exemption of corporations converting foreign currency to the lira and hiking the foreign revenue ratio that exporters are required to sell from 25% to 40%.

Turkish Lira Depreciates Further

The Turkish lira weakened past 15.2 per USD in May, the lowest since a series of unorthodox interest rate cuts sent the lira to an all-time low in December. Soaring energy prices lifted Turkey’s inflation rate to a 20-year high of 70% in April, further pressuring the government’s fragile lira deposit protection scheme amid low reserve levels and large negative real interest rates. Currency stabilization measures by the central bank failed to contain depreciation, as authorities imposed reserve requirements to ease lending and encourage conversion of foreign currencies to the lira. The moves follow ongoing revisions of the central bank’s policy framework to encourage the permanent “liraization” to the Turkish economy, including extending the tax exemption of corporations converting foreign currency to the lira and hiking the foreign revenue ratio that exporters are required to sell from 25% to 40%.

Turkish Lira at Over 4-Month Low

The Turkish lira was steady at 14.9 per USD in early May, hovering around levels not seen since December, as deep trade imbalances and a large negative real interest rates offset efforts by the central bank to stabilize the currency. The TCMB imposed new reserve requirement rules for banks to control loan growth and encourage conversion of foreign currencies to the lira, while also cutting the interest rate on lira-denominated required reserves to zero and ending interest payments on amounts converted from foreign currency. The moves follow ongoing revisions of the central bank’s policy framework to encourage the permanent “liraization” to the Turkish economy, including extending the tax exemption of corporations converting foreign currency to the lira and hiking the foreign revenue ratio that exporters are required to sell from 25% to 40%. While the TCMB shows no plans to hike its interest rate, Turkey’s April inflation reading came at a 20-year high 70%.

Turkish Lira Steady at 4-Month Low

The Turkish lira weakened to 14.9 per USD in early May, the lowest since December of 2021, as deep trade imbalances and a large negative real interest rates offset efforts by the central bank to stabilize the currency. The TCMB imposed new reserve requirement rules for banks to control loan growth and encourage conversion of foreign currencies to the lira, while also cutting the interest rate on lira-denominated required reserves to zero and ending interest payments on amounts converted from foreign currency. The moves follow ongoing revisions of the central bank’s policy framework to encourage the permanent “liraization” to the Turkish economy, including extending the tax exemption of corporations converting foreign currency to the lira and hiking the foreign revenue ratio that exporters are required to sell from 25% to 40%. In its April meeting, the TCMB held its key interest rate at 14%, despite Turkey’s latest inflation reading coming at a 20-year high 61.1%.

Turkish Lira at 4-Month Low

The Turkish lira weakened to 14.8 per USD in late April, the lowest in one month, as a worsening macroeconomic backdrop led investors away from riskier currencies. Meanwhile, the TCMB expanded measures to stabilize the currency, imposing new reserve requirement rules for banks to control loan growth and encourage conversion of foreign currencies to the lira. Previously, authorities cut the interest rate on lira-denominated required reserves to zero, while ending interest payments on amounts converted from foreign currency. The moves follow ongoing revisions of the central bank’s policy framework to encourage the permanent “liraization” to the Turkish economy, including extending the tax exemption of corporations converting foreign currency to the lira and hiking the foreign revenue ratio that exporters are required to sell from 25% to 40%. In its April meeting, the TCMB held its key interest rate at 14%, despite Turkey’s latest inflation reading coming at a 20-year high 61.1%.

Turkish Lira at 1-Month Low

The Turkish lira was steady at the 14.6 per USD level after the Central Bank of Turkey cut its interest rate on lira-denominated required reserves to zero, while ending interest payments on amounts converted from foreign currency to the lira. The moves follow the ongoing revisions of the central bank’s policy framework aimed to bring price stability and the permanent “lira-isation” to the Turkish economy, including extending the tax exemption of corporations converting foreign currency to the lira and hiking the foreign revenue ratio that exporters are required to sell from 25% to 40%. In its April meeting, the TCMB held its benchmark interest rate constant at 14% for the fourth consecutive decision, as expected by markets, despite Turkey’s latest inflation reading coming at a 20-year high 61.14%.

Turkish Lira Steady Following Stabilization Measures

The Turkish lira was steady at the 14.6 per USD level after the Central Bank of Turkey held its benchmark interest rate constant at 14% during its April 2022 meeting, as expected by markets. The central bank held its rate constant for the fourth consecutive meeting, following 500bps of unorthodox rate cuts since September of 2021, despite Turkey’s latest inflation reading coming at a 20-year high 61.14%. Still, the lira remains roughly 6% lower than levels before Russia’s invasion of Ukraine, as inflationary pressures and a worsened outlook for the country’s important tourism industry pressured the Turkish government’s fragile and costly lira deposit protections scheme.

Turkish Lira Steady Following TCMB Decision

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