Turkish lira rises more than 2 pct vs USD
Currency at six-week high
ISTANBUL, Oct 1, (RTRS): The Turkish lira strengthened more than 2 percent against the dollar on Monday, reaching its firmest in more than six weeks, on growing optimism of improving relations with the United States and following a hike in interest rates and the government’s new economic programme.
The lira, which has lost nearly 40 percent of its value this year, firmed to 5.91 by 1052 GMT from Friday’s close of 6.0550, its strongest since Aug 17.
“The lira has been in recovery mode over the past few weeks actually since the central bank delivered a proper rate hike on September 13th,” said Piotr Matys, emerging markets forex strategist at Rabobank.
“And this was followed by this new economic programme that addresses rebalancing overheated economy, and also last week market optimism that (the) US pastor Brunson could be released increased,” he said.
Relations between the United States and Turkey had deteriorated in recent months over a row caused by the trial in Turkey of US Christian pastor Andrew Brunson on terrorism charges. US President Donald Trump increased tariffs on Turkish steel in response.
Last week, Turkish President Tayyip Erdogan visited New York to attend a United Nations meeting, where he was photographed having a brief meeting with Trump, an exchange one Turkish official described as a “friendly chat”.
Amid the lira crisis, Turkey has attempted to calm financial markets, most notably with last month’s massive interest rate hike, and then the government’s “new economic programme” – which sharply cut growth forecasts and promised fiscal tightening.
Separately, Turkey’s exports rose 22.6 percent year-on-year in September to $14.5 billion, the Trade Ministry said on Monday, while imports fell 18.09 percent to $16.4 billion.
Additionally, Turkish manufacturing activity slid to its lowest level in nine years in September, a business survey showed on Monday, in what economists said was among the clearest signs yet that Turkey was headed for a deep recession after months of currency turmoil.