Tuesday, 28 May 2024

Turkish lira close to a record low against US dollar

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Turkish lira fell to a record low near 20 against the dollar today, Friday, ahead of a run-off in Sunday’s presidential election that will decide whether President Recep Tayyip Erdogan extends his rule for a third decade.

By 0508 GMT, the lira touched 20 against the dollar and continued to hover around this level, closing at 19.8695 against the dollar on Thursday, down 6.4 percent so far this year.

According to Reuters, Turkish sovereign stocks and bonds denominated in dollars have declined, while the cost of insuring exposure to Turkish debt has increased since the first round of the presidential elections held on May 14.

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On Thursday evening, Erdogan said in an interview that the Gulf countries had recently sent financing to Turkey, which helped ease the burden on the central bank and markets for a short period. He made it clear that he intends to meet with the leaders of these countries after the return round to give thanks

Erdogan had a significant lead over his main rival, Kemal Kılıçdaroğlu, in the first round, but was unable to win more than the 50 percent of the votes he needed to avoid a run-off.

And the demand for foreign currency increased during the election period, amid expectations that the lira will continue to decline after losing 44 percent of its value in 2021 and 30 percent in 2022.

The lira has fallen significantly this year since the devastating earthquakes in February, which killed more than 50,000 people and caused widespread destruction in a large area of southern Turkey. The lira has fallen 2.1 percent since the May 14 elections

Official data on Thursday showed that the Turkish central bank’s net foreign exchange reserves fell into negative territory for the first time since 2002 to -151.3 million dollars on May 19.

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