ISTANBUL, Dec 16 (Reuters) – The Turkish lira dropped to an all-time lowbeyond 15 against the dollar on Thursday ahead of another expected interest rate cutby the central bank, which has fallen in line with President Tayyip Erdogan’s risky new economic programme.
The lira touched 15.2 at 0606 GMT, a record low, and it has shed more than 50% of its value so far this year. The central bank is expected to cut its policy rate by 100 basis points to 14% at its policy-setting meeting later in the day, a Reuters poll showed despite inflation soaring above 21%.
Believe it or not, the Lira was 8.3 per dollar on 1 September. If Turkey cut rates more on Thursday we are going to see FX fireworks and this risks contagion to other EM currencies and also Eurozone banks exposed to Turkey. (We are talking about the world’s 20th largest economy here!)
JUST IN – Turkey's Erdogan raises the minimum wage by 50% amid the ongoing collapse of the Turkish Lira.
— Disclose.tv (@disclosetv) December 16, 2021
h/t by mark000