Turkish lira exchange rate

A new wave of COVID, falling stocks, and the Turkish lira exchange rate

Countries around the world are just beginning to forget about the quarantine measures and move on to their normal life. But yet another disappointing news comes from Shanghai. Residents in some areas of that city are once again forced to submit to quarantine measures. This news has had repercussions on the economy. 

In May of this year, many countries looked at China’s export figures with admiration. In recent months, China has increased its exports to a peak, reaching double-digit growth figures. Immediately after the news of the new COVID outbreaks spread, the dynamics of stocks plummeted. 

“Despite China’s ambitions on the road to economic recovery, the country has a “COVID zero” strategy. This means that the country will be forced back into a restrictive regime. This could dispel illusions about a quick economic recovery,” said Suzanne Streeter, senior investment analyst at Hargreaves Lansdown. 

The European Central Bank was planning an investor meeting. The meeting was expected to announce the end of the Chinese asset purchase program. The program went into effect earlier for the reason that experts had promised a rise in interest rates in July this year. Due to such changes, investors stopped betting heavily on Chinese equities. 

Some time ago, the public was surprised by the Reserve Bank of Australia by raising key lending rates. This is because investors are now seeking safe markets and are actively getting rid of high-risk investment portfolios in emerging markets. 

The other big news is about the Turkish lira. The lira fell to $17.21. This is a record low for this currency. The decline of the lira exchange rate takes its origin in December last year. Experts attribute the reason to the unorthodox monetary policy of the country. Due to this policy, the lira has fallen by 44% last year. Since the beginning of 2022, the decline in the lira exchange rate is 23%. Inflation in the Turkish economy is gaining momentum. 

Earlier information about these developments was mentioned in the Turkish market report and the Central European Markets Survey.

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