US dollar back at the limit of 18 TL after 7 months

Article by MURAT YETKIN (a prominent journalist) translated by BTT

“On July 27, the Turkish lira lost a little more value against the dollar just before the US Central Bank announced the FED’s interest rate decision, falling to the psychological limit of 18 lira, closing the day at 17.92.

The US dollar had last risen above 18 pounds to 18.57 on December18, 2021 and the Istanbul Stock Exchange had stopped trading due to depreciation, after which the government’s announcement of measures, on December 20.

Thus, despite all the measures taken and the sales of billions of dollars to the market from public sources (CBRT and all), the dollar reached the limit of 18 TL again after 7 months.

The only unchanged point is the official interest of 14 percent (as fixed by CBRT)

The inflation rate, which was 36.08 percent in December 2021 “when the December 20 decisions were made”, increased to 73.5 percent in July. While the cost of living has now risen to levels President Tayyip Erdogan has also agreed to, the only thing that has not changed has been the Central Bank’s official interest rate of 14 percent. The Treasury’s borrowing interest rate (from banks) is close to double that, at over 27 percent.

On the other hand, it is reported that the borrowing interest rate offered by some banks for the use of loans has reached 45 percent per annum as of July 27, and the interest offered to industrialists has exceeded this as well. On the other hand, foreign exchange accounts in banks have exceeded 56 percent of the total accounts.

There is concern that the Turkish lira will further lose value after the US Central Bank announced the FED’s interest rate decision, as expected.”

ORIGINAL LINK: yetkinreport.com/2022/07/27/dolar-7-ay-sonra-yeniden-18-lira-sinirinda/