Turkish lira slides 5%

The Turkish lira weakened for the third consecutive day on Wednesday, tumbling 5.6% and eating further into the huge gains made the previous week, as worries persisted over soaring inflation and unorthodox monetary policy. The losses gathered pace after little initial reaction to the central bank’s (CBRT) 2022 policy document, in which it said it will monitor risks related to the foreign exchange market and do what is necessary to ensure it runs smoothly. The lira plunged as far as 12.5 by 1253 GMT. Despite surging more than 50% last week following state-backed market interventions, it has lost 40% of its value this year. “The CBRT has no commitment to any exchange rate level and will not conduct FX buying or selling transactions to determine the level or direction of the exchange rates,” the bank said. It said it would monitor closely the impact of its policy decisions in the first quarter and “the policy framework will be reassessed in order to create a foundation for sustainable price stability.” The lira surged last week after billions of dollars worth of state-backed market interventions. 

Published in The Express Tribune, December 30^th, 2021.

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