The Turkish lira fell on Tuesday to a new record, exceeding 9 lira to the dollar, affected by uncertainty about pressures to cut interest rates further and by the rise of the dollar in general.

The price of the lira recorded its record level, which it reached last night at 9.02 liras in early trading, before recording 9.01 liras by 06:06 GMT.

The lira has fallen by about 18% against the dollar since the beginning of this year 2021, which exacerbated the rise in inflation, which reached 20%.

And Reuters reported last Friday - quoting sources - that President Recep Tayyip Erdogan is losing confidence in the central bank governor, Shihab Kocioglu, less than 7 months after the dismissal of his predecessor due to the delay in the stimulus policy.

In response to questions from a parliamentary committee on Monday, Koccioglu said that the interest rate cut last September was not surprising and did not achieve much in terms of selling the lira.

During the hearing in parliament, Koçoğlu said the central bank's reserves had stabilized after declining in the past few years and that they had taken an upward trend.

Data show that net foreign reserves have risen since last April.

Koccioglu sent more soft signals in a conference call with investors last week, according to conference participants, but did not say whether he expected a further rate cut.

For its part, the “Bloomberg” news agency indicated that the value of the lira fell by more than 5.9% last September, as this decline accelerated after the central bank’s unexpected decision to cut interest rates on September 23, which raised fears that Lowering interest rates is an obstacle to efforts to control inflation.


Winners and Losers

According to several experts Al Jazeera polled earlier;

The depreciation of the lira against the dollar is negatively reflected in a number of sectors, while there are still those who benefit from this situation.

Winners

  • Turkish companies exporting abroad, as the depreciation of the lira gives them greater competitiveness and an opportunity to sell goods at a better pace.

  • Foreign investors, because the decline of the lira motivates them to enter the Turkish market to seize investment opportunities at the lowest cost.

  • Foreign tourists, because the depreciation of the lira against hard currencies makes tourism in Turkey less expensive.

Losers


On the other hand there are

losers due to the

decline of the

Turkish lira ,

including:

  • Companies importing from abroad, because they pay more for importing goods and services.

  • Consumers at home, because the depreciation of the lira leads to an increase in prices at home, and thus an increase in inflation rates.