The Turkish lira climbed against the US dollar today, easing the pressure on the nation’s central bank to act in defense of the currency and its inflation goal.
Analysts speculate that the weakening lira increases upward risks to inflation, which have already prompted the Central Bank of the Republic or Turkey to increase interest rates in November. Turkish President Recep Tayyip Erdogan called for protection of the currency, claiming that its drop was the result of efforts from his enemies who have tried to remove him from power through a coup earlier this year. Economists argue, though, that political uncertainty is the real reason for the currency’s weakness.
USD/TRY plunged as much as 1.85% to 3.4592 as of 14:27 GMT today.
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