FX.co ★ Turkish Lira Tops New Lows

The Turkish lira reached a new record low, trading at 38.7 per US dollar, as investors assessed the nation's political and economic conditions. While the decision by the Kurdistan Workers' Party to halt its armed conflict marked a significant step toward resolving a long-standing security issue, its positive effects were dampened by external factors. The US dollar's strength, buoyed by the announcement of a 90-day tariff reduction agreement between the US and China, added further pressure on the lira. Concurrently, Turkey's central bank has been actively intervening in the foreign exchange market to stabilize the currency, which suffered a significant downturn in March following the arrest of Ekrem Imamoglu, the Mayor of Istanbul and a key political opponent of President Erdogan. This incident sparked the largest protests in over ten years and intensified concerns about increasing political instability. Consequently, the central bank raised interest rates in both March and April and implemented various additional measures aimed at supporting the lira.