Turkish Lira stabilizes despite interest rate peak

Shafaq News / The US dollar remained stable against the Turkish lira during early trading on Tuesday, despite reports indicating a peak in interest rates in Turkey after the Turkish central bank (TCMB) raised interest rates last Thursday.

Notably, the value of the Turkish lira reached 30.36 against the dollar.

Turkey is grappling with high inflation rates, with TCMB expecting inflation to range from 70% to 75% in May compared to the 65% rate recorded last month.

However, TCMB anticipates that tightening monetary policy will lead to a decline in inflation to around 36% by the end of the current year.

The Turkish lira has been steadily declining since 2018, but it experienced a significant depreciation in the summer of 2023 as Turkish authorities eased their grip on the exchange rate.

Furthermore, forecasts suggest that TCMB will commence an interest rate reduction cycle in the fourth quarter of 2024.