Turkish lira hits new low against US dollar

ISTANBUL

Alamy Photo

The Turkish Lira sank to a new low against the dollar yesterday, more than a week after the reelection of President Recep Tayyip Erdoğan.

The currency, which was propped up by the Central Bank before the presidential election, fell 6.7 percent to 23.16 liras per dollar in the afternoon trade.

Erdoğan was sworn in on June 3 after winning a historic election runoff on May 28 and named a new cabinet appointing market-friendly politician Mehmet Şimşek as the treasury and finance minister.

The former Merrill Lynch economist served as finance minister between 2009 and 2015 and deputy prime minister in charge of the economy until 2018, before stepping down ahead of a series of lira crashes that year.

Soon after taking office, Şimşek said: "We have no choice but to return to rational ground," a sign of shifting away from the unorthodox policy of lowering interest rates in order to fight high inflation.

Şimşek met with Hafize Gaye Erkan, a senior finance executive in the United States, who is believed to next central bank governor, local media reported this week.

Erkan, a woman and former co-CEO at First Republic Bank and managing director at Goldman Sachs, is widely expected to replace central bank governor Şahap Kavcıoğlu.

Under Kavcıoğlu’s watch, the bank's policy rate was decreased to 8.5 percent. It had been at 19 percent in 2021.

İpek Özkardeşkaya, senior analyst at Swissquote Bank, suggested that Şimşek was now supposed to “restore investor confidence.”