Lira to dollar exchange rate rises to 4-month high
by Daily Sabah
ISTANBULJan 21, 2016 - 12:00 am GMT+3
by Daily Sabah
Jan 21, 2016 12:00 am
The Central Bank of Republic of Turkey's decision not to take some monetary policy measures combined with the sharp fall in oil price has raised concerns which led investors to sell off assets denominated in Turkish Lira (TL). These two major developments have played part in the depreciation of the TL against dollar. The TL/dollar exchange rate exceeded 3.06 yesterday. Although the decline in energy prices means cheaper imports for Turkey, which is heavily reliant on energy imports, the sharp decline reduces the risk appetite of global investors to invest in emerging markets.
The TL/dollar exchange rate is consequently bound to increase, showing the weakening of the TL. On Tuesday, the exchange rate started the day above 3.04, then rose to 3.06. The Consumer Purchase Index to be announced in the U.S. may have some influence on the exchange rate, analysts indicate 3.02 as a support level of the exchange rate. Analysts foresee that if the exchange rate remains above 3.04 for a considerable time, it is possible for the exchange rate to reach the level of 3.07. Meanwhile, the TL/dollar exchange rate experienced its latest historical peak in Sep. at 3.0750.
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