Lira

Turkey's Central Bank on Jan. 24 increased the upper limit of its interest rate corridor to 9.25 percent from 8.5, a move that proved fruitless on the ailing Turkish Lira. 

The Central Bank's Monetary Policy Committee (PPK) kept its one-week repurchasing rate unchanged at 8 percent while the overnight borrowing rate was kept at 7.25 percent.

Turkish President Recep Tayyip Erdoğan is set to hold a meeting late on Jan. 16 with top economy officials, including ministers, senior civil servants and Central Bank Gov. Murat Çetinkaya, to discuss the recent volatility in the Turkish Lira and other economic developments, according to sources.

The Turkish Central Bank skipped its one-week repo auction on Jan. 16, aiming to boost the Turkish Lira by reducing the amount of local currency circulating in markets.        

The Central Bank has many instruments to counter "speculative" moves around the struggling Turkish Lira and its hands are not bound by political pressure, Economy Minister Nihat Zeybekci claimed on Jan. 13. 

The Turkish Lira has recently become the worst fragile currency of 2017, even performing worse than the Mexico peso, which has been under big pressure since Donald Trump was elected as the new U.S. president. 

Rating agency Standard & Poor's said on Jan. 11 that Turkey faces a serious foreign exchange rate risk after the lira currency hit a series of record lows, according to Turkey's Bloomberg HT television station.

The Turkish Lira rebounded on Jan. 12 as dollar weakness helped it move off record lows while emerging stocks rose to two-month highs, led by strong gains in Russia and some Asian bourses.

Turkey's embattled lira took a new pounding on Jan. 11 on foreign exchange markets as emergency measures announced by the Central Bank failed to impress markets.

The Turkish Lira has lost almost 10 percent in value against the U.S. dollar since the start of this year alone, falling to 3.84 to the greenback, having earlier reached a new historic low of 3.89.

Turkey’s lira continues to fall and there does not seem to be a bottom for that well. The drop, however, creates another side-effect: the rising inflation…

The currency dropped 1.5 per cent to TL3.59 against the dollar only last Thursday and on Tuesday it reached TL3,78. Against the Euro it dropped to TL4,01…

The Central Bank has responded to the Turkish Lira's historic plunge by cutting forex required reserves, in a move adding $1.5 billion in liquidity to the financial system, vowing additional steps if necessary. 

The statement helped stem some of the lira's losses, although analysts said more must follow to back the struggling currency.