2023-06-23 04:45:48
The Turkish lira fell by as much as 2.8 percent and hit a new record low early Friday morning, continuing to incur losses after the Central Bank raised interest rates yesterday, in a retreat from President Recep Tayyip Erdogan’s policy, in an increase that was less than expected.
The lira reached 25.2015 in its latest transactions, which is about 1.3 percent weaker than Thursday’s closing. When the currency hit a low of 25.59, it was almost 27 percent weaker against the greenback this year.
The Turkish central bank raised the main interest rate by 650 basis points to 15 percent and said in its first meeting under its new chairwoman Hafiza Ghaya Arkan, who was appointed by Erdogan after his election victory last month, that he would go further.
The move marked a change of course after years of monetary easing in which the rate of one-week repo agreements fell to 8.5% from 19% in 2021, an unorthodox policy pursued despite high inflation.
The median forecast in a Archyde.com poll was for a rate hike to 21 percent, and analysts said the lower-than-expected hike indicated that Arkan may not have much freedom to aggressively confront inflation under Erdogan’s watch.
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