Turkish lira declined for the fourth consecutive day

August 13, 2018 8:26 pmComments Off on Turkish lira declined for the fourth consecutive dayViews: 88

Turkish liraThe Turkish lira declined for the fourth consecutive day to a record low, while the sell-offs spread among the currencies of other emerging markets after President Recep Tayyip Erdogan showed no signs for agreement with the United States.

The TRY collapsed by 11% against the US dollar in small volume deals in Asia before limiting the decline after the Surveillance Agency took steps to curb the swap transactions of the crisis-prone currency.

Turkey will announce austerity measures, Finance Minister Berat Albayrak said on Sunday.

“The country has drawn up an action plan and its institutions will take the necessary measures to resolve the concerns of the financial markets”, said the Minister of Finance and the Treasury. In an interview, he explains that the plan is designed for banks and the real economic sector, including small to medium-sized enterprises most affected by exchange rate fluctuations. The Minister did not provide any details on what steps to take.

The turmoil between Turkey and the United States is weighing on the TRY, and the situation is unlikely to improve soon.

The Turkish currency has been the victim of a deepening crisis dictated by the government’s economic growth agenda at all costs and a sudden deterioration in US relations that sanctioned Turkey for the detention of an American priest. The depreciation of the pound has provoked turmoil on world markets on Monday, spreading pressure on other developing countries’ currencies.

The Turkish lira fell to the new record low of 7.2362 TRY per USD, and some banks said they avoided declaring buy and sell rates because of unprecedented volatility. The TRY later recovered slightly.

The South African rand fell to its weakest level for more than two years, while the Mexican peso and the Indonesian rupees also dropped their value.

The expanded sale has hit the Euro and the Australian dollar negatively, while stimulating demand for currency havens. The Euro fell by 0.3% against the USD dollar, while the yen strengthened positions.

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