Turkish Lira Falls After Central Bank Takes Rate Hike Off the Table

Turkey’s troubled lira fell to its lowest level since October on Thursday after its central bank scrapped a pledge to raise interest rates if needed.

The monetary tightening pause, now in its seventh month, is repelling investors already worried about double-digit inflation, unorthodox policy, political influence over the central bank’s independence, and dramatic yet unexplained moves in Turkey’s foreign currency reserves.



The lira was trading at 5.9502 to the dollar at 2:30 p.m. London time, and was down 1.5% at one point during the session. It is now down 7% on the greenback in the last month.

The Turkish central bank’s move has further shaken investor confidence in the country of 80 million, whose currency crash last year set off a run on emerging markets worldwide.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza