The Turkish lira fell once more in trading on Monday, reaching its lowest level since last December.
The Turkish lira is trading near its lowest level ever, especially since the big fall on December 20, when the price fell to 18.4 lira per dollar.
The Turkish lira was trading at 17.8600 once morest the dollar, a decline of 0.65 percent compared to the previous close.
This came following the Turkish Central Bank released the manufacturing confidence index data for the month of July, as the index fell by 103.7% compared to 106.4% in the previous month, June, a decline of more than 2.5%, which led to a negative impact on the exchange rate of the lira.
The current data for the manufacturing confidence index is the lowest in two years since the July 2020 data, when the index recorded levels of 100.7 points, compared to 92.6 points in the previous month at the time.
The lira fell more than 7 percent during this July trading, which coincided with the seventh fixing of interest rates by the Turkish Central Bank.
Last week, the Turkish Central Bank issued the interest rate decision, as the interest rate was fixed at levels of 14%.
The Turkish Central Bank’s decision came less than two days following the statements of Turkish President Recep Tayyip Erdogan regarding the country’s commitment to the low interest policy, in conjunction with describing the record inflation rates in Turkey as unjustified.
The Central Bank of Turkey said that in line with its main objective of price stability, the Central Bank of Turkey will resolutely continue to use all the tools at its disposal, until strong indications emerge of a permanent decrease in inflation and a medium-term target of 5%.
In December 2021, the Turkish lira fell to its lowest level ever when inflation data was announced, which reached its highest level in 20 years when it exceeded 36%, while inflation today is more than 78%.
The series of stabilization pursued by the Turkish Central Bank came following cutting interest rates by 500 basis points in 4 consecutive meetings from September to December 2021.
The Turkish Central Bank cut interest rates for the first time last year 2021 by 100 basis points in September, to be followed by a larger decline of 200 basis points in October, and then two cuts by 100 basis points in November and December.
The Turkish lira fell as a result of these cuts, which coincided with the ignition of inflation rates in the country, falling from levels near 7.5 liras dollars to levels near 18.5 liras dollars in December 2021.
