News ID: 321882
Published: 0339 GMT May 24, 2022

Turkish lira weakens to lowest since 2021 currency meltdown

Turkish lira weakens to lowest since 2021 currency meltdown
A money changer counts Turkish lira banknotes at a currency exchange office in Ankara, Turkey.

The Turkish lira weakened to a five-month low against the US dollar as monetary policy remains far too loose to curb inflation.

The lira slipped as much as 0.7% to 16.0477 per dollar on Tuesday, the lowest level since a currency crisis late last year. Consumer prices rose an annual 70% in April, well above the bank’s policy rate of 14%, Bloomberg reported.

The widening current-account deficit is also putting pressure on the currency and draining the nation’s foreign currency buffers. The stockpile shrank by $4.8 billion in the seven days which ended on May 13, the most this year.

The drop in reserves “denotes growing difficulties in keeping the lira stable amid intensifying headwinds,” Cristian Maggio, head of the portfolio strategy at TD Securities in London, wrote in a May 20 note to clients.

Late last year, the currency went into freefall, weakening from less than 10 per dollar in mid-November to an all-time low of 18.3633 on Dec. 20.



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