How low can the Turkish Lira go ?

New lows for the Turkish Lira against the Usd. This seems to be connected to the attacks of the president Recep Tayyip Erdogan against the president of the National Central Bank Mr. Erdem Basci.
M.r Basci seems to be under pressure for a further expansion of the monetary policy. Now the Turkish Lira is exchanged for 2.2535 against the U.S. Dollar. Today Mr Nihat Zeybkci, the minister of economy, has declared that the National Bank has to pursuit the national interest and has also invited the government to change the rules of the Turkish National Bank.

Mr Basci has been criticized by the government for not having lowered the rates more quickly. Now the markets expect the Turkish Lira to test lower levels because of the tensions between the National Bank and the government.
It is possible to see the exchange rate at 3 Liras for 1 Dollar within this year, according to some analysts. Meanwhile the rate of the bonds with one year maturity has bounced at 8.85 %. The rate is now 200 basis points higher from December 31.

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1 Response

  1. This blog was… how do you say it? Relevant!! Finally
    I’ve found something that helped me. Many thanks!

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