The Turkish national currency has dropped to its historical low of around 25 liras against the US dollar after the Central Bank of Turkey raised the key rate not as significantly as was anticipated, trading data showed on Friday
MOSCOW (Pakistan Point News / Sputnik - 23rd June, 2023) The Turkish national currency has dropped to its historical low of around 25 liras against the US dollar after the Central Bank of Turkey raised the key rate not as significantly as was anticipated, trading data showed on Friday.
As of 05:17 GMT, the US dollar rate against the Turkish lira was rising to 25.13 liras per the US dollar, from the previous closing level of 24.109 liras, the trading data showed. The indicator was trading above 25 liras per dollar for the first time.
On Thursday, the Turkish Central Bank raised its key rate for the first time in more than two years, from 8.5% to 15%, in the policy U-turn to fight inflation. It was made at the regulator's first rate-setting meeting under the new head, Hafize Gaye Erkan. Many analysts expected a sharper increase, as Turkey's annual inflation stood at 39.6% in May.
In recent years, Turkish President Recep Tayyip Erdogan has pursued a policy of keeping the interest rate low. The Central Bank decreased the interest rate from 19% in early 2021 to 8.5% last February. The Turkish currency has lost more than 80% of its value in the past five years, and 44% of its value in 2021 alone.
