forex

ALL-TIME LOW LEAVES TURKISH LIRA FLAT  

The lira plunged to a record low at the start of the trading week after one among the world’s premier credit rating agencies struck Turkey with a credit downgrade and geopolitical tensions between Turkey and Greece. After cratering to a rock bottom this last spring, does this mean the lira can experience another record low this year?

 

At the start of the trading week, Moody’s Investor Services lowered Turkey’s credit rating from “B1” to “B2,”; thus warning of a more severe financial crisis. The agency listed the country’s external vulnerabilities that would balance payment distress, adding that its fiscal tools are decaying.

 

The rating group replied that the central bank’s exchange reserves, rather than the gross domestic product, are at their lowest in decades

The central bank has been doing everything to prop the lira, including invading its forex reserves, which currently stand at $44.8 billion, down from over $80 billion at the start of 2020.

As a consequence, Moody’s cut is bringing Turkey’s sovereign rating closer to trash territory. Overall, Moody’s is keeping a pessimistic economic outcome.

On the data front, retail sales surged 9.5% in July, down from the 18% spike in June. The upper retail sales for the third continuous month implied that domestic demand is recovering. The Turkish economy reported gains in food and beverages, electronics, household goods, automotive fuel, and apparel.

In July, industrial production advanced at an annualized 4.4% rate, beating three market forecasts. This is often also up from the tepid 0.4% jump in June. Automobile output also skyrocketed 44.3% year-over-year last month, up from the 11.8% contraction in July.

The USD/TRY currency pair rose 0.05% to 7.4913, from an opening of 7.4881, at 19:23 GMT on Tuesday. The EUR/TRY dropped 0.06% to 8.8767, from the start of 8.8828.

 

Sending
User Review
0 (0 votes)

RELATED POSTS

Leave a Reply

tmn-img-28-1

Share this on

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

Rec­om­mended for You

Subscribe to Our Newsletters

Have The Best Of Trade Market News Delivered Directly To Your
Mailbox. Subscribe To Receive The Latest Market News.