Turkish currency in further trouble as lira hits 7.49 low against US dollar

Turkey’s lira weakened to a record low beyond 7.49 against the dollar on Wednesday under the impact of rising risk aversion, which raised selling pressures globally.

The lira hit a low of 7.4920, bringing losses against the US currency this year to nearly 21 percent, among the world’s worst performers. However, it has outperformed emerging market peer currencies in the latest sessions.

By 07:45 GMT, the lira edged back to 7.4870.

With the Turkish currency having fallen in six of the last seven sessions, investors are still looking for signals as to whether the central bank has halted its month-long backdoor policy tightening.

The central bank has tightened credit since a sell-off hit the lira from the end of July. The average cost of funding rose and then steadied near 10.15 percent in recent days.

The bank’s policy rate is 8.25 percent.

Turkey can capitalize on coronavirus: Finance Minister

Finance Minister Berat Albayrak was reported on Wednesday as saying Turkey can capitalize on the legacy of the global coronavirus crisis by putting a competitive lira at the heart of a new strategy to move to a more export-focused economy.

In response to emailed questions from Bloomberg, Albayrak said all leading indicators indicate economic recovery is gaining pace in the third quarter and Ankara expected the second half recovery to be “V-shaped”.

“I believe our growth rate will be significantly above 5 percent in 2021 if there won’t be another major wave in the outbreak,” he said.