Historically, the Turkish lira (TRY) has risen against the US dollar (USD). for years now, but things somehow become more difficult, and the ratio between the two currencies hit another low time on April 3.
What is clear is that the rapid decline came as Turkey did report prices lower than expected for the year, even amid all the problems related to the Iran war.
In particular, consumer prices rose 30.9% year-on-year, reflecting a 31.5% decline in February. On a monthly basis, inflation fell to 1.94%, down from 2.96%. The data also showed that the domestic producer index rose 2.30% month-on-month in March (an annual increase of 28.08%).
Currently, the annual increase in food remains above inflation, as food and soft drinks increased annually by 32.36%. Likewise, transportation prices increased by 34.35%, while housing, water, electricity, gas, and other fuels increased by 42.06%.
The Turkish lira is under pressure
However, the lira remains under pressure, trading 0.18% lower against the US dollar as of writing.
A notable problem emerged in March, when the lira came under pressure in the coming market sell-off triggered by the Middle East conflict. At the same time, the country’s central bank halted its rate cut and tightened policy further.
Responding to the news, the Governor of the Central Bank, Fatih Karahan, said in a statement Summary of the Inflation Report for policymakers to take a defensive stance in trying to support integration. As a result of such policies, the lira fell by only 1.2% in March.
Overall, the Bank’s strategy seems to be about maintaining monetary stability as the key to reducing inflation. Looking ahead, it expects a decline of 16% by the end of the year.
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