The Turkish lira was steady at the 17.3 per USD mark, the lowest in six months, after the Turkish central bank held interest rates at 14% in its June 2022 meeting. The TCMB’s decision to hold rates came despite President Tayyip Erdogan’s pledge to continue slashing borrowing costs in a speech earlier in the month, which would add to the 500bps in rate cuts since August that pressured the lira to an all-time low of 18.4 in December. Largely negative interest rates assisted the lira to consolidate as the worst performing emerging market currency this year, dropping nearly 25% against the dollar. At the same time, surging energy and food costs lifted annual inflation to 73.5% in May, further pressuring the government’s fragile lira deposit protection scheme. Harsh stabilization measures by the central bank and efforts to balance reserve levels have done little to offset negative borrowing costs.
Historically, the Turkish Lira reached an all time high of 18.46 in June of 2022. Turkish Lira - data, forecasts, historical chart - was last updated on June of 2022.
The Turkish Lira is expected to trade at 17.82 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 20.94 in 12 months time.