Turkish lira hits historic lows against euro and dollar

The Turkish Lira continued its depreciation on Tuesday, recording new lows against the Euro and Dollar.

Anticipation is building regarding the Central Bank of Turkey’s decision on interest rates due Thursday.

By 10.20 am (07.20 GMT), the Euro traded at 30.37 Lira, crossing the 30-Lira mark for the first time in history. Simultaneously, the Dollar was trading at 26.88 Lira, a record high.

The Lira’s depreciation has accelerated since the parliamentary and presidential elections in late May.

In June alone, the Lira lost 20% of its value and has depreciated by 29% since the start of the year.

Experts suggest that further currency losses coupled with recent fuel price hikes could fuel inflation at 38.21% YoY last month.

Investors are now focused on Thursday’s Central Bank meeting, where a potential interest rate hike is expected.

The Central Bank raised the key interest rate by 650 basis points from 8.5% to 15% in the last session, declaring its intention to tighten credit further to curb inflation significantly.

Many economic experts predict another rate hike announcement, with expectations ranging between 17% and 21.5%.