Fall of The Turkish Lira Over Two-Week

The Turkish lira fell 0.7% today, recording a decline in ten of the last eleven sessions, with high inflation, global bond yields and oil prices in a test of the central bank’s pledge to tighten monetary policy.

After raising interest rates to 17% in December, Central Bank Governor Naji Iqbal said on Friday that “we will take decisive steps” to stabilize the double-digit inflation rate.

He added that a “systemic shift” occurred in November when he took over the bank’s chairmanship.

The pound has risen about 20% since November, but it has given up half of these gains in the last two weeks, and reached 7,575 against the dollar, near the lowest level this year.

For Turkey, which depends on imports and does not produce any of its energy needs, the depreciation of the lira raises the cost of imports.

US crude hit its highest level in more than two years today after reports of attacks on Saudi facilities.

Analysts expect Turkey’s central bank to raise interest rates next week to stabilize the currency and tackle inflation, which exceeded 15% last month.