No official reason was given for the sacking, but government sources cited Erdogan's frustration that the bank has kept its benchmark interest rate at 24% since last September to support the ailing lira
STRUCTURAL PROBLEMS:The lira
has also been under pressure from domestic political developments.Currency volatility in the run-up to local elections on Sunday led the central bank to suspend one-week repo auctions, a move seen by analysts as a "back door" tightening that reignited worries that the central bank was under pressure from politicians to lower its policy rate.
The EBRD said risks to its forecasts included uncertainty about the banking sector as well as about the direction of economic policy and from a further possible depreciation of the lira
. It said the lira
remained vulnerable because of the Turkish economys heavy dependence on foreign capital.
On the lighter side, the Turkish lira
equals to PKR 19 rupees currently, almost a record low considering that in June the lira
equalled PKR 30.
The fresh lira
collapse on Sunday night hit Asian shares, weakened South Africa`s rand and drove demand in global markets for safe currencies including the dollar, Swiss franc and yen.
"The Turkish lira
has finally found some support after two days of intense selling that triggered panic across the markets," said Fawad Razaqzada, market analyst at Forex.com, adding that the lira
had clawed back most of the previous day's losses.
Where the specialists in currency trading stressed that the slippage of the value of the lira
will not be dealt with superficial actions and must be radical treatments with more moderate political positions, especially with the United States and the European Group, which takes Turkey's positions on human rights
This article will explore the historic context behind the Turkish lira
's woos since the formation of modern Turkey, investigating key economic factors and attempting to answer the above questions.
Many point to growing concerns over Turkish debt and President Recep Tayyip Erdogan's announced intention to exert more control over monetary policy as the reasons behind the plunge in the value of the lira
The Turkish lira
(TRY) has repeatedly reached new lows in the recent weeks, having accumulated a loss of more than 15 per cent against the US dollar year-to-date.
What happened throughout the game, though, shocked Lira
For some of Turkish President Tayyip Erdogan's aides, the mere suggestion that the central bank should raise interest rates as the lira
slides through new record lows amounts to a plot against the state.