[ad_1]
Source: Arabic.net
The Turkish lira fell to a new record against the dollar, approaching the lowest level since the height of the currency crisis in 2018, with investors turning their attention to the economic repercussions of the spread of the emerging Corona virus in Turkey.
The Turkish lira exchange rate fell to less than seven pounds against the dollar, amid mounting pressure on the economy in light of the emerging Corona pandemic and fears of the collapse of the tourist season.
The exchange rate of the Turkish currency reached a record low of 7.03451 against the dollar, that is, at more than 0.7%.
Turkey’s foreign exchange reserves have declined since the early 2020s. Total reserves, including gold, have fallen more than $ 17 billion this year to less than $ 88 billion.
Drain reserves
The consensus among economists and investors is that the depletion of reserves is the result of the central bank using the reserve fund to finance intervention in the currency that is supposed to be free.
Eric Myerson, chief economist at Handelsbanken Swedish Bank, said: “Since 2015 you have had these seasons, as soon as the lira approaches three, four, six or seven (lira versus the dollar) the game of cat and mouse begins. Every time this happens, “You see the reserves start to slip,” according to the Al-Iqtisadiah newspaper.
Central bank governor Mourad Oissal has said the bank has not set a target for the exchange rate, amid heavy pressure on the economy.
Murat Uisal, the governor of the Central Bank of Turkey, denied Turkey’s attempt to defend a certain level of the pound. He said at a press conference: “We can see very clearly that this is not the case,” referring to the currency’s fall since March. He added that the “fluctuations” in the bank’s foreign exchange reserves are “very normal” and “temporary.”
However, the fight continues above the seven pound level against the dollar. Traders say that one of the two sides of the conflict includes the central bank and state banks, which sell the dollar on their behalf every time the lira slides to this level.
The other part includes a wide range of lyre sellers, from Turkish families and companies to foreign investors, who want to sell the lira or get a dollar.
Increased demand for the dollar.
Paul McNamara, investment manager at GAM Asset Management, said the reason for the weakening of the lira is the increased domestic demand for dollars and foreign goods due to the recent campaign of economic growth backed by credit from President Recep Tayyip Erdogan. “When the government drives credit growth, we always see that this quickly translates into higher imports, putting pressure on the current account,” he added.
Reports expected the Turkish economy to be severely affected by the Corona pandemic this quarter, before it starts to recover in July.
The head of Turkey’s Association of Shopping Centers said there are plans for a gradual reopening of the centers starting May 11 at the request of retailers and the approval of an advisory board from health authorities.
Turkey has closed shopping malls, schools, restaurants, and coffee shops to stem the rise in cases of Covid-19 disease. However, some workplaces are still open, partial orders have been imposed to stay home, borders have been largely closed, and internal movement has slowed.
Trade, spending, industrialization and consumer confidence, which hit a record low this month, were confused as measures to contain the virus led the Turkish economy to its second slump in less than two years.
Hussein Al-Iss, an official with the Council of Shopping Centers, said in an interview that the reopening scheduled for May 11 may initially exclude cinemas, stadiums and restaurants, as it will be difficult to comply with social separation rules, until the government agrees.
He added that the hardest hit cities like Istanbul, the worst region in terms of the virus outbreak in Turkey, are likely to remain closed for a longer period. He explained that all shopping centers across the country can reopen in June.
Data from the Turkish Health Ministry on Sunday showed that the number of people who died from Covid-19 in Turkey increased by 61 people in the past 24 hours to 3,397.
The data also indicated that the total number of HIV infections increased from 1,670 to 126,045, which is the highest result outside of Western Europe, the United States, and Russia.
So far, 6.3151 people have recovered from the emerging coronavirus. The number of tests carried out in Turkey in the last twenty-four hours reached 24,001, bringing the total number of tests since the outbreak of the pandemic to more than 1,135 million.
[ad_2]
