Turkish lira sinks to record low vs. US dollar amid high inflation
The value of the troubled Turkish currency, lira, has crashed to a record low against the US dollar due to growing security concerns after the Istanbul terror attack as well as a higher-than-expected inflation rate.
The lira traded at 3.59 to one dollar on Tuesday, a further rate loss of 1.38 for the day after it collapsed earlier through the 3.6 lira ceiling, marking the first time on record that its value weakened that low against the American currency.
The Turkish currency was thrashed earlier by an unanticipated sharp rise of inflation back in December, generating expectations of rate hikes this month.
Consumer prices climbed 8.5 percent in December compared to the same month in the previous year and also by 8.5 percent for the entire past year.
Prices in Turkey further increased by 1.64 percent since November, much more than anticipated by financial analysts.
Moreover, the New Year’s Eve terrorist attack on a nightclub in Istanbul, which left 39 people dead, was considered a key factor in the declining value of the Turkish lira.
The terror assault, claimed by the Daesh Takfiri terrorist group, was the latest in a wave of deadly attacks in the past several months in Turkey, which is widely suspected of backing militants in Syria and Iraq.
The mostly Daesh-linked terrorist attacks in Turkey, as well as several more by the Kurdistan Workers’ Party (PKK), have battered the country’s vital tourism industry and debilitated investments.
The Turkish currency has lost a whopping 24 percent of its value against the dollar only over the past six months. It has so far lost 53 percent in value over the past two years, after it traded at 2.34 per US dollar at the outset of 2015.