The Turkish lira fell around 0.8% to a new all-time low of 10.075 against the US dollar.
This decline comes in one moment in which Iran and Turkey expressed their desire to strengthen regional and bilateral cooperation, during the visit of the Turkish Foreign Minister, Mevlut Cavusoglu, to Tehran on Monday.
“We had important and useful discussions. We agreed to develop relations between the two countries,” said Iranian Foreign Minister Hossein Amir Abdollahian. in a joint press conference with his Turkish counterpart.
Haitham al-Jundi, chief market analyst at T-Matrix, described in an interview with “Al Arabiya” the decline of the Turkish lira, as “a reflection of Turkey’s move against the global trend. In a moment in where the world is moving towards monetary tightening, Turkey strengthens Unjustified monetary easing with interest cutsThis trend exacerbates negative real interest rates that damage the currency.
El-Gendy attributed the Turkish lira crisis to concern over monetary policy, given President Recep Tayyip Erdogan’s repeated calls for interest rate cuts and his frequent changes in central bank leadership.
The central bank is expected to cut the interest rate to 15% this week, according to a Reuters poll, even as inflation remains close to 20%.
The recent decline in the lira was also exacerbated by the rise in the dollar after higher-than-expected US inflation data.
The lira, the worst of the emerging market currencies questyear, it has lost two-thirds of its value in five years, reducing citizens’ incomes, while inflation has risen to double digits.
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