12 C
Frankfurt am Main

Lira reaches four-month high thanks to thaw in Turkey-US relations

Must read

The Turkish lira continued its winning run against peers on Thursday, firming to its strongest level since early April thanks to a thawing of Turkey-US relations and a months-long trend of policy easing among major central banks, Reuters reported.

The lira stood at 5.4835 as of 1223 GMT, strengthening from Wednesday’s close of 5.4955. It has risen seven of the last 10 trading days and is up more than 11 percent from early May, which marked its weakest level this year.

The lira has risen as the US Federal Reserve has prepared in recent months to cut interest rates, depressing the dollar. It remains down 3.5 percent this year after shedding some 30 percent in last year’s currency crisis that tipped the economy into recession.

The Fed cut rates a notch last week and more US accommodation is expected, which could give the lira more room to run.

A fall in inflation in recent months and a dramatic drop in Turkey’s current account deficit compared to last year have also driven lira gains against the dollar.

A record over the last year in Turks’ foreign currency holdings has loomed as a key concern for investors, though, in another possible reprieve, those levels have edged down in recent weeks, according to central bank data

The lira’s 5.5 percent gain so far this quarter is the best among 29 emerging markets and nearly double that of the second-best Ukrainian hryvnia.

It has risen despite Ankara abruptly sacking Turkey’s central bank governor last month and risking US sanctions over buying Russian missiles, silencing for now critics who had warned such moves could cause another crisis.

Liked it? Take a second to support Turkish Minute on Patreon!
Become a patron at Patreon!
More News
Latest News