Last year the Lira plummeted to a record low against its US rival as social unrest and political concerns laid waste to the currency.
Now, just two weeks in to a new year, the Lira has fallen to a fresh record low in response to data showing that Turkey’s current-account deficit swelled to a four-month high.
The nation’s deficit widened from 2.9 billion US Dollars in October to 3.9 billion in November, slightly better than estimates for a deficit of 4.3 billion.
Favourable energy prices prevented the deficit from widening to expected levels, but the Lira still dropped against the majority of its currency rivals, including a broadly strengthening British Pound.
As chief economist Tim Ash observed; ‘This just affirms that the pace of improvement is just not moving fast enough to quickly eradicate concerns over Turkey’s key Achilles’ heel.’
The Lira was also adversely affected by the news that Prime Minister Recep Tayyip Erdogan referred to the recent corruption probe as an ‘unethical coup’ when speaking to Parliament earlier today.
Erdogan asserted that those backing a graft probe are hoping to dent Turkey’s economy and force the nation’s central bank into increasing interest rates.
The Lira also hit a record low of 3.0004 against the Euro.
In other exchange rate news, as the Pound was supported by surprisingly upbeat UK inflation data the British asset was able to extend gains against the Lira.
Similarly, the US Dollar advanced further on the news that retail sales in the world’s largest economy increased by slightly more than expected in December, rising by 0.2 per cent rather than the 0.1 per cent forecast.
Tomorrow additional Lira movement is likely to follow the publication of Turkish unemployment data. The nation’s unemployment rate is forecast to fall from 9.9 per cent to 9.6 per cent.
Current Turkish Lira (TRY) Exchange Rates:
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,Turkish Lira,3.6075 ,
US Dollar,,Turkish Lira,2.1900 ,
Euro,,Turkish Lira,2.9902 ,
Australian Dollar,,Turkish Lira,1.9743 ,
New Zealand Dollar,,Turkish Lira,1.6846 ,
[/table]
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