First Published: 2017-01-03

Turkey lira crashes to historic low
Higher than expected inflation figures, security concerns after Istanbul attack cause lira to crash to new historic low against the dollar.
Middle East Online

Turkish lira

ANKARA - Turkey's embattled currency the lira on Tuesday crashed to a new historic low against the US dollar due to higher than expected inflation figures and security worries after the Istanbul nightclub attack.

The lira was trading at 3.59 to the greenback, a loss in value of 1.38 percent on the day. Earlier it crashed through the 3.6 lira ceiling, the first time in history it has been this weak against the dollar.

The currency was battered by a surprisingly sharp uptick in December inflation which fuelled expectations of rate rises in January.

Prices rose 8.5 percent in December from the same month the year earlier and also by 8.5 percent for the year as a whole. Prices rose 1.64 percent from November, much more than expected by analysts.

Meanwhile, the attack claimed by the Islamic State (IS) extremist group on an Istanbul club on New Year's night that killed 39 people also pressured the currency.

It was the latest in a string of attacks in Turkey in recent months that have battered the crucial tourism sector and harmed investment.

The lira has now lost 24 percent in value over the last six months against the dollar. Over the last two years it has now lost 53 percent in value, having traded at 2.34 to the dollar at the start of 2015.

 

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