FX.co ★ Turkish Lira Hovers Near Record Lows

In April, the Turkish lira neared its record low, trading at approximately 38 per US dollar, as traders evaluated the nation’s political and economic landscape. In an unexpected decision, the central bank raised the benchmark one-week repo rate from 42.5% to 46% at its April meeting, aiming to bolster investor confidence. This move came on the heels of an emergency rate hike in March when the central bank increased the overnight lending rate to stabilize the currency. This intervention was necessitated by a severe sell-off, sparked by the arrest of Ekrem Imamoglu, the chief political adversary to President Erdogan, which incited the largest demonstrations in more than ten years. Concurrently, Turkey saw a deceleration in inflation for the tenth consecutive month, with rates easing to 38.10% in March. This marked the lowest inflation level since December 2021, falling short of market predictions of 38.90%.