Turkish Lira hits record low below 10 against US Dollar

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Turkish Lira hits record low below 10 against US Dollar

Turkish Lira, a long-hailed currency of a fiscally embattled nation that had been facing off a flurry of geopolitical issues alongside a soaring inflation over past five years, had hit a record low on Friday and traded below 10 against its American counterpart in context of a growing concern that the Central Bank’s Governor Sahap Kavicoglu, would slash interest rate again at a meet scheduled to take place next week.

As of late-afternoon US trading hours on Friday, Turkish Lira, which had pummeled more than 25 per cent this year, tumbled to 10.01 against the greenback compared to a 9.92 logged on Thursday’s market closure. The battered Turkish currency, which had shed over a jawdropping 66 per cent over past five years amid an unprecedented inflation-surge that started to flare up shortly after the Turks had begun to claim the sea territory of Greece and Cyprus alongside natural resources of the region, again becomes the worst-performing emerging market currency this year with Turkish CPI (Consumer Prices Index) surging as much as 20 per cent on a year-on-year basis, barely leaving anything for the Turkish people to coffer while eating up much of their earnings.

Turkish Lira falls below 10 per Dollar for the first time

In tandem, latest steep downward spiral in Turkish Lira came against the backdrop of a stronger US inflation reading on Wednesday that had unveiled the US CPI had soared to a 31-year peak on October on an annualized basis, which eventually had prompted traders to cash in on an earlier-than-anticipated rate-hike bet while drowning the Turkish currency further.

Since September, Turk Central Bank had trimmed benchmark borrowing cost by 300 bps (basis percentage point), as President Tayyip Erdogan who had ousted three Cen. Bank governors in less than two years, had reportedly been favoring a lower interest rate to drive growth instead slashing Government expenses and budget deficits.