In what could be contemplated as a vivid demonstration of a dour economic outlook for the emerging market economies amid pandemic induced fiscal drawdowns, the once-cherished Turkish Lira had faltered to an all-time low against its American counterpart on Thursday, as investors appeared to have digested the impacts of a global recession caused by the pandemic outbreak over the narratives of a growing weakness in the country’s economy.
Amid conflicting narratives on whether the Turkish Central Bank had been vying to vent out a way to streamline its sharply devaluing currency that faltered as much as 19 per cent against the American Dollar thus far this year, the Turkish currency had plunged to 7.307 against its American peer on Thursday, storming past the previous low of 7.26 recorded on May.
In point of fact, the Turkish economy, which has been in the brink of a US sanction since last year over purchasing of Russ anti-aircrafts, had already been in a recession before the onset of the pandemic outbreak.
Turkish Central Bank vows to use all available fiscal tools to yield price stability
Meanwhile, as the latest drop in Turkish Lira seemed to be stoked in part by a wider current account deficit and higher inflation alongside the Government of President Tayyip Erdogan to push for cheap credits to thrive an economy which had already been fragile before the pandemic as beforementioned, adding that the ailing transcontinental economy’s Central Bank was closely monitoring the market developments, Turk Central Bank said in a statement on Thursday, “The Central Bank will use all available instruments to reduce the excessive volatility in the markets in line with the price stability and financial stability objectives”.
Nonetheless, the Turkey’s Central Bank had touted that the impacts of recent global-scale pandemic outbreak had been limited on Turkish economy thus far saying, “Recent data suggest that economic recovery has gained pace. ”