Turkish Lira Declines to Record as Rising Fed Bets Add to Risks

EghtesadOnline: Turkey’s lira weakened to a record as deteriorating economic data added to concerns about the nation’s outlook amid rising expectations that the Federal Reserve will boost U.S. interest rates.

News ID: ۷۷۰۳۱۵

13 October 2016

The currency depreciated 0.6 percent to 3.1057 per dollar at 10:24 a.m. in Istanbul, extending its decline this year to 6.1 percent. The previous record was 3.0973, reached in the aftermath of the unsuccessful July 15 coup, reports Bloomberg.

Data released on Wednesday showed the nation’s current-account deficit in August was wider than expected, adding to a list of economic and political risks that are weighing on investor sentiment. Growth in the nation’s gross domestic product has slowed, the government’s budget deficit is set to widen and the country extended a state of emergency it imposed after the failed putsch.

Meanwhile the central bank slashed borrowing costs this year, diminishing the appeal of lira assets, as investors brace for higher U.S. interest rates that may spur outflows from emerging markets.