Turkish Lira shows strength against dollar

ANKARA - Anadolu Agency

REUTERS Photo

The Turkish Lira has shown significant strength against the U.S. dollar over the last two weeks, as traders have shrugged off the effects of the U.S. Federal Reserve (Fed) rate hike and the Turkish Central Bank’s decision to hold rates steady.

After the Fed raised its key interest rate to the range of 0.25 to 0.50 percent from 0 to 0.25 percent on Dec. 16, the lira has risen steadily against the U.S. dollar, jumping from about 2.94 to the dollar to about 2.9 in early morning trading on Dec. 29.

Many traders had also predicted a drop in the lira after the Turkish Central Bank held rates on Dec. 22.
A number of emerging market currencies have continued to fall against the dollar, while the lira has held firm, despite weakness from both developed and emerging market currencies. The dollar index is up 10 percent against the basket of major currencies for 2015.

The South African rand, the Russian ruble and the Brazilian real have all fallen at least 20 percent against the dollar since the beginning of the year, while the lira, which had been down 20 percent as well, has seen a comeback.