Turkish lira hits record low against US dollar

Xinhua Xinhua

12th Oct, 2021. 07:33 pm

ISTANBUL: The Turkish currency weakened to a record low of 9.03 against the US dollar on Tuesday, amid concerns over the central bank’s recent monetary policy.

In September, the Turkish Central Bank unexpectedly cut its benchmark interest rate by 100 basis points, and reduced the policy rate (one-week repo auction rate) from 19 per cent to 18 per cent.

Before the interest rate cut, however, the exchange rate was at 8.30 for one dollar.

Experts argued that shifting towards an easing policy despite the high inflation caused the national currency to weaken. Foreign investors decreased their investments in Turkey by approximately 3.5 billion dollars in the week following the interest rate cut, said press reports, quoting the central bank’s data.

The country has been battling double-digit inflation and a weakening currency, which has lost more than half of its value since 2018. Annual inflation climbed to 19.58 per cent in September, mainly driven by soaring food prices.

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