The Turkish Lira is Falling After Record Highs

The Turkish lira fell after record highs over five days, disregarding the messages of reassurance from the government.

The currency fell 6.2% to 11.3399 per dollar, on a weak trading day, and since the beginning of the year, the lira has lost 34% of its value, which is the largest decline among emerging market currencies.

President Recep Tayyip Erdogan said on Friday that the lira would “gradually” stabilize after taking measures to support it, including a new tool to protect lira deposit holders.

Erdogan’s statements indicate that the government is seeking to direct the exchange rate below the level of 9 to the dollar, according to Aksoy. He said Turks continue to buy foreign currency despite official assurances.

Confidence among Turkish manufacturers declined in December, according to central bank data released on Monday, due to currency fluctuations.