By the end of spring, the Turkish lira exchange rate will reach its lowest level in history, reaching 33 lira per US dollar. This prediction was given to socialbites.ca by Candidate of Economic Sciences Mikhail Zeltser, stock exchange expert at BCS World of Investments, commenting on the record fall of the lira at the auction on March 11.
“The Turkish lira continues its systematic weakening in an environment of very high inflation of 67% in February and these are the peaks of the indicator since November 2022, the persistent negative trade balance (exports less than imports), the upcoming elections. March and the resulting increased budget expenditures; wages have increased strongly, and this is also a factor that supports inflation and causes devaluation,” explained the expert.
Zeltser stated that the price of the Turkish lira has fallen by almost 8.5 percent since the beginning of the year, and this is in addition to the 60 percent collapse of the lira in 2023.
“The Central Bank of the Republic of Turkey is fighting inflation and devaluation by increasing the interest rate and the funding cost increased to 45% in February, but as we see, this does not help much and the effect of the Central Bank’s harsh policy is expected only in the second half of the year. “For this reason, expectations for devaluation of the lira are still high and there may be new rises in the dollar and declines in Turkey’s national currency before the end of spring.”
According to him, the lira is also collapsing relative to the ruble: the TRY/RUB pair was already below 2.8 and this is a historical bottom and another one will follow – Devaluation of the ruble is not expected, the Central Bank of the Russian Federation follows a harsh policy on the key interest rate, Russian Mandatory standards are in place for the sale of exporters’ foreign exchange earnings. Zeltser therefore concluded that it may be too early to tactically buy the lira.
On March 11, the Turkish lira exchange rate reached its lowest level in history, reaching 32 lira per US dollar.
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