Turkey’s lira lost more than 1% of its value on Monday, continuing its sharp decline since President Erdogan replaced the central bank governor this month, leading to expectations of loose policy.
The lira was up about 0.7% at 8.08 against the dollar as Sahap Kavcioglu, the new central bank governor who was appointed in a shock overhaul this month, played down “prejudiced” expectations of an interest rate cut in April or the following months. His comments however failed to stabilize the Turkish currency in the later hours.
The lira stood at 8.14 against the dollar at 0818 GMT, down from 8.0775 at Friday’s close. Earlier, it weakened more than 1% to 8.1700.
Emerging market currencies in general slipped on Monday to hover near three-week lows as an improving U.S. economic outlook lifted demand for the dollar. , while at the initial trading hours the Turkish lira bounced after closing its worst week since 2018 in the previous session.
Turkish lira crashed 11% last week after Kavcioglu’s appointment raised fears of a reversal of a series of interest rate hikes since November that had revived the currency amid concerns of Turkey’s depleting forex reserves and high inflation.
Reuters