THE Turkish Lira has dropped to a new all-time low yet again, seeing TL 2.6 against the U.S. dollar amid the strengthening trend of the greenback and investor concerns about the fate of Turkish economic management.
According to analysts, political pressure on the Turkish Central Bank for a rate cut despite the tumble in the lira in addition to contradictory remarks about economic management has triggered distress in the market, adding to the lira's pain.
Efforts by Turkish Prime Minister Ahmet Davutoglu and his economic team to soothe the nerves of investors in New York, who hold more than a fifth of the main Turkish stock index, appeared to have had little immediate effect.
Turkish President Tayyip Erdogan has demanded deeper rate cuts to drive growth, despite stubborn inflation.
That has raised concern about the futures of Central Bank Governor Erdem Basci and Deputy Prime Minister Ali Babacan. An anchor of investor confidence, Babacan looks increasingly unlikely to return to office after June's general election.
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