The Turkish Lira Exchange Rate was in the region of 0.5656 against the US Dollar as of 14:30 pm GMT
Last week things got a little testy between the Central Bank of the Republic of Turkey and the nation’s economy minister Zafer Caglayan as the effectiveness of the financial body’s policies were called into question.
During an interview with CNBC-e Caglayan reportedly criticised the banks efforts at boosting economic growth. He was quoted as saying: ‘We will not achieve what we expected last year. This is what I meant when I said ‘let’s put the foot on the gas’’.
Although growth in Turkey has been steady in comparison with other nations during the global economic crisis the central bank has thus far taken a cautious policy approach, attempting to boost domestic demand without permitting the rapid loan growth which would widen the current account deficit and fuel inflation.
But last year economic growth dropped from 8.5 per cent in 2011 to roughly 2.5 per cent, and for many international investors and economists this stance isn’t having the desired effect.
The central bank is already fighting to protect its independence, and with elections on the horizon action was needed.
Consequently, the bank has followed the lead of many of its contemporaries and attempted to weaken the Turkish Lira through cutting overnight interest rates.
The Central Bank of the Republic of Turkey slashed the overnight borrowing rate by quarter of a percentage point to 4.5 per cent, dropping the overnight lending rate by the same amount to 8.5 per cent. Although the benchmark one-week repo rate was left unaltered, the bank also upped foreign exchange reserve requirements by 0.4 per cent to 11.1 per cent – extracting 940 million Dollars from the market.
Last month the Lira’s Real Effective Exchange Rate exceeded the central bank’s limit, showing the Lira to be overvalued. After the decision was announced the Lira shed 0.7 per cent against the US Dollar, hitting a near six-week low. The currency also fell against the majority of its developed currency rivals.
In response to the move Societe Generale’s head of global emerging markets strategy commented: ‘This seems to be the new policy mix of choice on the part of the central bank, still favouring a dovish bias on the rates front, just to make sure that the Lira doesn’t strengthen too much, but also keeping a close eye on credit developments.’
Current TRY Exchange Rates
The Turkish Lira to Pound Sterling exchange rate is currently trading at 0.3643
The Turkish Lira to Euro exchange rate is currently trading at 0.4237
The Turkish Lira to US Dollar exchange rate is currently trading at 0.5656
The Turkish Lira to Australian Dollar exchange rate is currently trading at 0.5362
The Turkish Lira to New Zealand Dollar exchange rate is currently trading at 0.6703
The Turkish Lira to Canadian Dollar exchange rate is currently trading at 0.5656
The Turkish Lira to Emirati Dirham exchange rate is currently trading at 2.0892
The Turkish Lira to Swiss Franc is currently trading at 0.5158
The Turkish Lira to Japanese Yen exchange rate is currently trading at 52.6604
These exchange rates were correct as of 14:30 pm GMT
Comments are closed.