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Turkish lira weakens for ninth day, data shows economic woes

Category: Economy

Date: 2022-03-11T09:47:35+0000
Turkish lira weakens for ninth day, data shows economic woes

Shafaq News / The lira weakened for a ninth consecutive session on Friday as investors calculated the impact on Turkey of Russia's invasion of Ukraine, with data showing a widening current account deficit and rising inflation expectations.

The lira fell as much as 0.7% to 14.9780 against the dollar, half its value a year ago, and bringing its losses since January to 12%.

The leap in energy and commodity prices came as the Ukraine conflict further stoked Turkey's surging inflation, which exceeded 54% in February, and widened its current account deficit. Turkey is heavily dependent on energy imports.

The January deficit, while less than forecast, widened to $7.11 billion - its highest level in four years - from $3.84 billion a month earlier, reflecting the impact of surging energy imports.

This threatens to derail President Tayyip Erdogan's new economic plan, which aims to achieve a current account surplus and to keep interest rates low to help boost growth, exports and employment.

Meanwhile factory output growth in January slowed sharply to 7.6% year-on-year, below forecasts and dipping 2.4% from a month earlier after energy supply disruption, data showed.

The negative backdrop also pushed the end-2022 consumer price inflation forecast to 40.47% from $34.06% a month earlier, a central bank survey of market participants showed. The end-2022 lira-dollar forecast jumped to 16.6774 from a prediction of 16.0431 a month earlier.

(Reuters)

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