The Turkish lira hit fresh lows against the dollar Wednesday, slumping nearly 5% as concerns mounted over challenges facing the country's new finance...
The Turkish lira sank to new lows against the U.S. dollar on Wednesday, as concerns mounted over challenges facing the country’s new finance minister, and a report emerged that state lenders have stopped selling dollars to defend it.
The dollar USDTRY climbed to 23.029 against the lira, a drop of more than 6%. That’s as investors continued to put money into Turkish stocks, in a bid to escape high inflation, with the BIST index XU100 up 3.1% and 117% higher over the past 12 months. Erdoğan, who won a fierce election battle despite his widely criticized economic management and response to deadly earthquakes earlier this year, has pushed for deep cuts in borrowing costs in an unorthodox view that inflation relief would come.
“In past years, Turkey didn’t lack talented finance ministers or smart central bankers. But each time sometime tried to do his/her job correctly – which in Turkey means raising the rates – he/she got rapidly sacked. Therefore, what investors want to see in Turkey is not how talented Mehmet Simsek is in finance, but how resistant he will be to the low-rate pressure from the presidential office,” she said.
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