Turkish lira weakens against dollar for fifth day

Turkish lira weakens against dollar for fifth day

by Joseph Anthony
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The Turkish lira eased a further 0.85 per cent against the dollar on Wednesday, weakening for a fifth session and bringing the currency back towards the lows it hit in late December after a series of unorthodox interest rate cuts.

The lira weakened as far as 15.38 in morning trade from a close of 15.2490 on Tuesday. It stood at 15.3405 at 1157 GMT.
A currency crisis late last year sent the lira to a record low of 18.4 on Dec. 20, triggering state measures to underpin the lira through a scheme to protect lira deposits against depreciation and major forex market interventions.
Following a 44 per cent slide in 2021, the lira has dipped another 14 per cent this year after a long period of stability was upset by concerns about the economic fallout from the war in Ukraine, which sent Turkeyโ€™s already-hefty energy import bill soaring.
The Turkish central bank sold $3.296 billion in foreign currency in April to Turkeyโ€™s state economic enterprises, primarily energy importer Botas, reflecting the rising cost of energy imports.
The currency crisis last year was sparked by a series of rate cuts long sought by President Tayyip Erdogan, who supports the unorthodox view that higher interest rates cause inflation. The liraโ€™s depreciation stoked inflation, which hit 70 per cent in April.
Erdogan said on Wednesday that Turkey had been fighting against โ€œattacksโ€ through exchange rates and interest rates for a long time. He said Turks were facing a high cost of living, adding that economic problems were temporary.
REUTERS

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