binance left Coinmarketcap net_left adver left

Lira on four-day skid as Ankara struggles to hold confidence

Thursday, December 30, 2021
Lira on four-day skid as Ankara struggles to hold confidence © Reuters. FILE PHOTO: Hassan al-Khalaf, owner of al-Manar currency exchange bureau, counts Turkish lira banknotes inside his office in the opposition-held city of Idlib, Syria, December 4, 2021. REUTERS/Khalil Ashawi

By Ezgi Erkoyun and Nevzat Devranoglu

ISTANBUL (Reuters) - The Turkish lira fell as much as 6% on Thursday, extending a four-day slide after last week's big gains, as the government struggled to convince savers to ignore the volatility and worries over surging inflation and unorthodox rate cuts.

While Finance Minister Nureddin Nebati said Turks' dollar holdings have been falling, official data showed local holdings of hard currencies soared to a record billion last week.

At the same time the central bank's net foreign currency holdings - its effective buffer against financial crisis - plunged to nearly a two-decade low.

The lira has shed as much as 20% in four trading sessions, reversing a more than 50% rally over the previous five days triggered by a new state scheme to protect local deposits from depreciation losses versus hard currencies.

However, Thursday's data showed that most of last week's lira appreciation in fact had been driven by central bank intervention, said Per Hammarlund, chief EM strategist at SEB.

"(The locals) are not rushing to convert their dollar savings into lira, that is for sure," Hammarlund added.

On Thursday, the lira weakened to 13.4 to the dollar before recovering to 13.00 by 1630 GMT, still down 4.7% on the day. Swinging from 18.4 to 10.25 over the last two weeks, the lira's dizzying ride has seen Turks' savings depleted and household budgets upended.

The fast-moving currency crisis was set off by a series of aggressive interest rate cuts beginning in September that were sought by President Tayyip Erdogan under his "new economic programme" focused on exports and credit.

Economists and opposition lawmakers called the easing reckless given inflation had climbed above 21%, and is expected to soar beyond 30% this month and in the months ahead, due to the sharp lira depreciation.

Nebati - whom Erdogan appointed earlier this month - said on Wednesday the volatility was not worrying and predicted single-digit inflation by 2023, which is much more optimistic than analysts' views.

Nebati also said there were no state interventions to sell dollars and boost the lira last week, despite data showing reserves fell in what bankers and economists said reflected state-backed market support.

THIN BUFFER

Central bank data showed net international reserves hit $8.63 billion last week, their lowest since 2002, from $12.16 billion a week earlier. Gross forex reserves fell $5.81 billion to $72.56 billion.

The central bank has announced five direct interventions this month to support the lira, which bankers say totaled $6-$10 billion. There were no intervention notices in the last two weeks, when the reserves began to plunge.

Foreign currency and gold held by Turkish locals reached $238.97 billion last week. Adjusted for parity effect, holdings rose $1.46 billion, while those of individual investors alone fell by $136 million.

Graphic: FX held by Turkish locals-https://fingfx.thomsonreuters.com/gfx/mkt/myvmnbmdlpr/FX%20held%20by%20Turkish%20locals.PNG

The scheme unveiled by Erdogan is meant to reverse the tide of dollarisation. Under it, the Treasury or central bank covers the difference between deposit rates and the foreign exchange and gold rate for lira converted into the new instrument.

The scheme provided some backstop for the currency, said Marek Drimal at Societe Generale (OTC:SCGLY), though "market participants need to see tangible steps to address underlying problems in the economy."

Many economists and political analysts warn that if the lira continues to depreciate, the scheme could stoke inflation and add to the state's fiscal burden.

"Emergency measures put in place are only going to give short term relief; in the long term, they seem likely to exacerbate the crisis," said Howard Eissenstat, associate professor of Middle East history at St. Lawrence University in New York State.

Nebati told broadcaster CNN Turk that 59.8 billion lira ($4.60 billion) were in the protected deposits as of Wednesday and local investors' foreign currency deposits declined by $7 billion to $162 billion since the scheme was announced.

Some analysts say the scheme and a 50% minimum wage rise could pave the way for Erdogan to hold snap elections before scheduled in 2023.

SEB's Hammarlund predicted the lira would face more volatility in the weeks ahead.

"They are just pulling one rabbit out of the hat after another, so it is hard to say what the next measure could be."

($1 = 12.9914 liras)

Leave your comment
ig right nyse right Neteller adver right
APPROVED BROKERS
rakuten_main right top net_home_top ig_main right top Binance _ main right top fbs_main right top tifia_main right top
18-01-2022 10:35:38 (UTC+7)

EUR/USD

1.1356

-0.0051 (-0.45%)

Summary

Neutral

Moving Avg:

Buy (6)

Sell (6)

Indicators:

Buy (5)

Sell (3)

EUR/USD

1.1356

-0.0051 (-0.45%)

Summary

Neutral

Moving Avg:

Buy (6)

Sell (6)

Indicators:

Buy (5)

Sell (3)

GBP/USD

1.3589

-0.0056 (-0.41%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (9)

Sell (0)

USD/JPY

114.63

+0.03 (+0.02%)

Summary

↑ Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (1)

Sell (7)

AUD/USD

0.7195

-0.0015 (-0.21%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (0)

USD/CAD

1.2515

-0.0004 (-0.03%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (7)

EUR/JPY

130.16

-0.56 (-0.43%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (2)

Sell (8)

EUR/CHF

1.0408

-0.0016 (-0.15%)

Summary

↑ Buy

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (8)

Sell (1)

Gold Futures

1,816.65

+0.15 (+0.01%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (0)

Silver Futures

23.512

+0.594 (+2.59%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (0)

Copper Futures

4.4183

-0.0022 (-0.05%)

Summary

↑ Buy

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (6)

Sell (2)

Crude Oil WTI Futures

84.86

+1.56 (+1.87%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (8)

Sell (2)

Brent Oil Futures

87.61

+1.13 (+1.31%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (1)

Natural Gas Futures

4.315

+0.053 (+1.24%)

Summary

Neutral

Moving Avg:

Buy (6)

Sell (6)

Indicators:

Buy (3)

Sell (5)

US Coffee C Futures

240.18

+0.53 (+0.22%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (1)

Euro Stoxx 50

4,264.85

-37.29 (-0.87%)

Summary

↑ Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (1)

Sell (7)

S&P 500

4,598.84

-64.01 (-1.37%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (3)

Sell (4)

DAX

15,793.65

-140.07 (-0.88%)

Summary

↑ Sell

Moving Avg:

Buy (5)

Sell (7)

Indicators:

Buy (1)

Sell (6)

FTSE 100

7,570.35

-40.88 (-0.54%)

Summary

Sell

Moving Avg:

Buy (6)

Sell (6)

Indicators:

Buy (2)

Sell (6)

Hang Seng

24,112.78

-105.25 (-0.43%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (8)

Sell (0)

US Small Cap 2000

2,121.90

-39.65 (-1.83%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (2)

Sell (6)

IBEX 35

8,776.20

-62.50 (-0.71%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (8)

BASF SE NA O.N.

67.920

-0.220 (-0.32%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (3)

Sell (4)

Bayer AG NA

51.78

-1.04 (-1.97%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (7)

Allianz SE VNA O.N.

226.00

-1.05 (-0.46%)

Summary

↑ Sell

Moving Avg:

Buy (5)

Sell (7)

Indicators:

Buy (3)

Sell (6)

Adidas AG

256.05

+3.40 (+1.35%)

Summary

↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (0)

Sell (9)

Deutsche Lufthansa AG

7.125

-0.116 (-1.60%)

Summary

Neutral

Moving Avg:

Buy (6)

Sell (6)

Indicators:

Buy (1)

Sell (5)

Siemens AG Class N

143.16

-2.84 (-1.95%)

Summary

Buy

Moving Avg:

Buy (9)

Sell (3)

Indicators:

Buy (4)

Sell (1)

Deutsche Bank AG

11.947

-0.071 (-0.59%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (1)

Sell (6)

 EUR/USD1.1356Neutral
 GBP/USD1.3589↑ Buy
 USD/JPY114.63↑ Sell
 AUD/USD0.7195↑ Buy
 USD/CAD1.2515↑ Sell
 EUR/JPY130.16↑ Sell
 EUR/CHF1.0408↑ Buy
 Gold1,816.65↑ Buy
 Silver23.512↑ Buy
 Copper4.4183↑ Buy
 Crude Oil WTI84.86↑ Buy
 Brent Oil87.61↑ Buy
 Natural Gas4.315Neutral
 US Coffee C240.18↑ Buy
 Euro Stoxx 504,264.85↑ Sell
 S&P 5004,598.84↑ Sell
 DAX15,793.65↑ Sell
 FTSE 1007,570.35Sell
 Hang Seng24,112.78↑ Buy
 Small Cap 20002,121.90↑ Sell
 IBEX 358,776.20↑ Sell
 BASF67.920↑ Sell
 Bayer51.78↑ Sell
 Allianz226.00↑ Sell
 Adidas256.05↑ Sell
 Lufthansa7.125Neutral
 Siemens AG143.16Buy
 Deutsche Bank AG11.947↑ Sell
Mua/Bán 1 chỉ SJC
# So hôm qua # Chênh TG
SJC Eximbank6,115/ 6,155
(-5/ -5) # 1,167
SJC HCM6,110/ 6,170
(0/ 0) # 1,183
SJC Hanoi6,110/ 6,172
(0/ 0) # 1,185
SJC Danang6,110/ 6,172
(0/ 0) # 1,185
SJC Nhatrang6,110/ 6,172
(0/ 0) # 1,185
SJC Cantho6,110/ 6,172
(0/ 0) # 1,185
Cập nhật 18-01-2022 10:35:41
Xem lịch sử giá vàng SJC: nhấn đây!
ↀ Giá vàng thế giới
$1,816.26-3.07-0.17%
Live 24 hour Gold Chart
ʘ Giá bán lẻ xăng dầu
Sản phẩmVùng 1Vùng 2
RON 95-IV2400024480
RON 95-II,III2390024370
E5 RON 92-II2291023360
DO 0.05S1838018740
DO 0,001S-V1873019100
Dầu hỏa1719017530
ↂ Giá dầu thô thế giới
WTI$85.45-0.06-0.07%
Brent$87.64+0.030.03%
$ Tỷ giá Vietcombank
Ngoại tệMua vàoBán ra
USD22.560,0022.870,00
EUR25.241,6226.656,50
GBP30.202,2531.491,85
JPY191,95203,20
KRW16,5120,11
Cập nhật lúc 18:54:36 18/01/2022
Xem bảng tỷ giá hối đoái
binance main right Fxpro Main Right aetos main right adver main right