On November 7, the Turkish lira touched a rate of 28.6 lira per dollar, with trading data confirming the move. At the day’s weakest point, the lira slipped to 28.64 per dollar, before recovering modestly to about 28.5 by 18:30 Moscow time. This year’s exchange rate has shown a steep decline, with the lira losing more than half its value from the start of the year. Analysts point to policy decisions by President Erdoğan as a key factor, noting that economists’ guidance was not heeded and that the currency weakness reflects broader amid- macroeconomic pressures.
Even with a possible increase in the policy rate to the mid-30s, inflation in Turkey could still hit around 68 percent by year’s end. For context, inflation subsided from a rate near 85 percent in 2022, yet remains a dominant concern for policymakers and markets. Beyond the lira, other emerging-market currencies, including the Russian ruble and the Argentine peso, also faced substantial pressure in 2023, underscoring a wider tone of volatility across the region.
In the prior week, market participants weighed expectations for the ruble, with many forecasting a strengthening bias toward around 90 rubles per dollar in the near term. Observers cited factors such as exporters resuming the sale of foreign earnings, alongside a softer dollar on the back of the U.S. Federal Reserve’s recent moves, as potential drivers of this dynamic. The broader narrative suggests a backdrop of shifting monetary conditions and the interplay between domestic policy settings and external financial conditions.
Earlier communications from officials regarding a baseline ruble exchange-rate framework have contributed to market interpretation of where the currency could head, shaping expectations for how the ruble might respond to ongoing external and internal developments. These evolving perspectives reflect the delicate balance central banks navigate when managing inflation, growth, and currency stability in a landscape marked by global uncertainty.