The Turkish lira weakened further to 15.9 per USD in May, edging closer to the all-time low of 18.4 hit in December, as surging inflation and recession worries exerted selling pressure on the risky currency. Soaring energy prices lifted Turkey’s inflation rate to a 20-year high of 70% in April, further pressuring the government’s fragile lira deposit protection scheme amid low reserve levels and large negative real interest rates. Currency stabilization measures by the central bank failed to contain depreciation, as authorities imposed reserve requirements to ease lending and encourage conversion of foreign currencies to the lira. The moves follow ongoing revisions of the central bank’s policy framework to encourage the permanent “liraization” to the Turkish economy, including extending the tax exemption of corporations converting foreign currency to the lira and hiking the foreign revenue ratio that exporters are required to sell from 25% to 40%.
Historically, the Turkish Lira reached an all time high of 18.41 in December of 2021. Turkish Lira - data, forecasts, historical chart - was last updated on May of 2022.
The Turkish Lira is expected to trade at 15.90 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 17.24 in 12 months time.