Turkish President Erdogan declares end to Lira's decline

By Al Mayadeen English
Source: Agencies
22 Nov 2023 16:37

The Turkish president noted that constructive reforms and prudent economic policies are instilling confidence among investors.

Turkey's President Recep Tayyip Erdogan talks to the media during his visit at the chancellery with German Chancellor Olaf Scholz in Berlin, Germany, Friday, Nov. 17, 2023 (AP Photo/Markus Schreiber)

Turkish President Recep Tayyip Erdogan on Wednesday announced that the Turkish lira's decline has come to an end, expressing a strong likelihood of the currency gaining strength against the US dollar.

"The program we are conducting to reduce inflation with a very high probability can result in a real assessment of the lira's value. So the process of lira depreciation has ended, there is a high probability that the lira will strengthen," Erdogan told reporters upon his return from Algeria.

The Turkish president noted that constructive reforms and prudent economic policies are instilling confidence among investors, with the expectation that this will result in an influx of liquidity and an actual improvement in the lira's exchange rate.

"As a result, there will be reasonable [economic] growth and, at the same time, inflation will decrease," Erdogan added.

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Since the start of 2023, the Turkish currency has experienced monthly depreciation, with the exception of the month of August.

The most significant decline occurred in June when the lira dropped by nearly 25%, falling from 20.8 liras to 26 liras per dollar. The following month, the exchange rate surpassed 27 liras.

October marked a historic low for the Turkish currency, reaching below 28 liras per $1 for the first time ever.

Despite the impression of a positive turn, as described by Erdogan, inflation in Turkey remains above 70 percent and is projected to average 65 percent in the year 2024, according to the country's Central Bank.

Moreover, it is unlikely that any foreign currencies will pour into the Turkish economy before the elections are held.

So the probability of the lira strengthening could be due for more time to come.