ANKARA
The Turkish lira dropped to its lowest rate – 2.7420 – against the U.S. dollar on Friday.
The fall came after Turkey’s Central Bank announced two days earlier that a key interest rate would remain unchanged at 7.5 percent, despite expectations the rate would be raised to address the lira’s fall against the dollar.
“The decline in the U.S. dollar against the Turkish lira started right after the central bank’s decision to hold rates,” Adnan Cekcen, a financial analyst at Destek Securities in Istanbul, said.
“The absence of a rate change at this meeting and also their abstinence from implementing additional measures to stem the slide in lira, which they hinted at recently, pushed the rate to higher levels.”
Cekcen said the lira’s record low against the dollar was being by markets anticipating the central bank’s non-intervention.
“Markets had been expecting a decisive move from the central bank but its dovish stance and its unchanging statements boosted the anticipation that the dollar would rise higher,” he told the Anadolu Agency.
“Now markets believe levels near 2.70 are not a concern for the central bank as it did not step in with decisive action.”
