Turkish currency strengthens to 11.1 lira per US dollar

The Turkish national currency rose sharply, strengthening to 11.1 lira per US dollar after a record fall to 18.4 on December 20, Report informs referring to the trading data.

On December 16, the Central Bank of Turkey decided to reduce the discount rate to 14% from 15%, which caused a sharp drop in the Turkish lira. However, on December 20 evening, its fall was replaced by a significant increase. As a result, the lira compensated for the losses of the last days.

On December 21, the lira continued to rise, and as of 10:30 a.m. (GMT+4), it rose to 11.67 lira per US dollar from the previous close of 13.21 lira per US dollar. Earlier on December 21, during trading, the lira rose to 11.15 per dollar.

The sharp rise in the lira began after the statement by Turkish President Recep Tayyip Erdogan during a Cabinet meeting on new measures to counter exchange rate volatility. He said that the government will provide exporters with a forward exchange rate from the Central Bank, increase government contributions to private pension funds and reduce the tax on dividends paid by companies. Erdogan also said that the government will encourage deposits in lira, compensating citizens for losses due to exchange rate volatility.

The Turkish currency in January traded at the rate of 7.4 lira per dollar and at the time of reaching a historical minimum fell by 60%, and the currency lost more than 40% of the value over the past month.