The Turkish lira was quoted at 4.74 against the dollar early on Monday – it improved slightly at the end of trading on Tuesday reaching 4.71 against the dollar. The Turkish lira concluded on Thursday, before Eid al-Fitr, at 4.64 against the dollar, at a time when investors have eye on outcomes of the presidential and parliamentary early election next Sunday.
The Turkish lira relapsed in May and at the beginning of June, which pushed the Central Bank to intervene twice to raise the interest rate from 13.5 percent to 16.5 percent then 17.75 percent and to simplify the monetary policy.
International rating agencies attributed this sharp relapse to investors’ concerns from Turkish President Recep Tayyip Erdogan tightening the grip over the monetary policy of the country following the elections – this raised concerns that the central bank might lose its independence which pushed many investors to withdraw their investment from Turkey.
Erdogan and his government considered that Turkey is facing a conspiracy that aims at distancing him and his party from the ruling after 16 years during the coming elections. Erdogan called on citizens to participate in foiling what he called an economic conspiracy that is being plotted against Turkey through transferring their foreign currencies to Turkish lira.
Erdogan threatened to respond to the financial sector in case of any currency manipulation.
In a related context, total financial assets of the Turkish economy reached TRY11.29 trillion until the fourth quarter of 2017. On another level, data issued by Turkish Statistical Institute revealed that unemployment rate dropped to 10.1 percent in the period between February and April from 10.6 percent one month ago and 11.7 percent one year ago.
