The Turkish lira fell past 26.7 per USD from the two-month high of 25.7 touched on August 24th as the outlook of a hawkish Fed following the Jackson Hole Symposium supported the greenback. Still, the lira remains above the record-low of 27.2 from August 22nd, supported by the central bank’s sharper-than-expected interest rate hike. The TCMB raised its key interest rate by 750 basis points to 25%, exceeding predictions of a 250 basis point increase and propelling borrowing costs to their highest point since January 2004. Notably, the move followed a 250 basis point rise in July and a 650 basis point surge in June. In July, headline inflation soared to 47.8% in July, and is projected to escalate to approximately 60% by the end of the year due in part to currency depreciation. President Erdogan's previous calls for rate cuts triggered a currency crisis in late 2021, resulting in inflation surging above 85% last year.
Historically, the Turkish Lira reached an all time high of 29.01 in August of 2023. Turkish Lira - data, forecasts, historical chart - was last updated on August of 2023.
The Turkish Lira is expected to trade at 27.10 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 28.85 in 12 months time.