FX.co ★ Turkey's lira hits record lows

Last week, Turkey’s lira fell to record lows, CNBC reported. According to analysts, the Turkish government's inability to balance the monetary policy to combat 10% inflation was the reason behind the decline.

Geopolitical uncertainty over the military conflict in Syria also prompted the fall. On April 13, the Turkish currency made a rebound on the back of top officials’ statements about possible action regarding the exchange rate. However, that did not help much. The currency climbed back by only 0.74%, hitting 4.08 lira to the dollar.

Turkey’s President Recep Erdogan has been opposed to tightening monetary policy and raising rates, despite inflation reaching a whopping 10.23%. This causes discontent among emerging market investors.

The lira, which had lost 13.9% since August 2017 to an all-time low of 4.1944 against the dollar, is currently considered one of the worst-performing emerging market currencies.

Meanwhile, Turkey's treasury bond yields reached highs and its current account deficit increased by more than 60% to $4.152 billion in February.

The Turkish real GDP growth came in at 7.4% in 2017, more than double the pace of 2016. According to analysts’ estimates, it is the highest growth rate among the G20 members.