The Turkish lira … the worst among emerging market currencies

The Turkish lira … the worst among emerging market currencies
The Turkish lira … the worst among emerging market currencies
The Turkish lira overtook the Brazilian real on Tuesday, becoming the worst performing currency among emerging markets this year, after a record low it recorded today, according to Bloomberg News.

Significant decrease

With a decline of 1.4% against the dollar, to around 8.5434 Tuesday, and a break of the 10-pound barrier against the euro for the first time, the size of the decline in the currency’s value this year reached about 30%.

The lira’s decline has accelerated since the Turkish Central Bank last month defied expectations by maintaining the main repurchase rate for one week, while continuing to enact measures to raise the cost of borrowing, at a time when markets expected it to intervene by raising interest rates, in an attempt to enhance its value against Foreign currency basket.

The impact of the US elections

The lira has been declining continuously since the beginning of the year, due to the possibility of Joe Biden winning the US elections, which worries traders who are already worried about the widening current account deficit in Turkey, dwindling foreign exchange reserves, geopolitical tensions, and the increase in coronavirus infections.

Biden will likely take a tougher stance against the Turkish government than President Donald , over the country’s purchase of the Russian S-400 missile defense system.

Trade deficit

On Friday, data from the Turkish Statistical Institute showed that the country’s foreign trade deficit rose by 189.6% year-on-year in September, to $ 4.828 billion according to the general trade system, at a time when tourism revenues fell by 71.2%.

The institute said in its report that Turkish exports increased by 4.8%, while imports jumped 23% compared to September 2019. In the first nine months of the year, the trade deficit jumped 79.5% to 37.86 billion dollars.

Rescue attempts

In an attempt to save the lira, the Turkish central bank raised the main interest rate by 200 basis points to 10.25%, last September, and it was the first increase in two years, after it reached a series of record low levels, against hard currencies over a month, according to Reuters. “.

Despite this measure, the US bank, Goldman Sachs, suggested that Turkey would suffer less than expected economic contraction, a wider current account deficit this year, and a further rise in interest rates.

These were the details of the news The Turkish lira … the worst among emerging market currencies for this day. We hope that we have succeeded by giving you the full details and information. To follow all our news, you can subscribe to the alerts system or to one of our different systems to provide you with all that is new.

It is also worth noting that the original news has been published and is available at saudi24news and the editorial team at AlKhaleej Today has confirmed it and it has been modified, and it may have been completely transferred or quoted from it and you can read and follow this news from its main source.