Turkish lira continued to depreciate, while the Turkish central bank could not restore confidence in the national currency. Turkish lira fell to new lows on Wednesday, despite efforts by the central bank to assist the market by selling dollars. It makes the British have the worst results this year, with loss of more than nine percent against the dollar, according to Reuters.
Only Wednesday pound fell 2.5 percent against the dollar amid fears that the bank may take measures strong enough. Bank reluctance to climb interest rates to stem the fall of the Turkish lira has heightened fears caused by bombing military, economic slowdown and political uncertainty linked to plans to boost the power of the President Tayyip Erdogan.
The Turkish lira has lost about a quarter of its value against the dollar after the attempted coup in July. On Tuesday, the central bank cut reserve ratios for foreign currency by 50 basis points in a move designed to bring to market $ 1.5 billion of liquidity title.
Erdogan's priority is growth and wants lower cost borrowing in the economy. He is a fierce critic of high interest rates. Some of his advisors and ministers argued that the depreciation of the Turkish lira is part of an attack on the Turkish economy.
At its last meeting establishing the policy rate in December, the central bank defied expectations of changes in the reference interest and has maintained its level. A new setting interest could take place on January 24. Turkish lira also depreciate against the single European currency, reaching 4.1089.
