| |
|
 |
The US dollar exceeded TL 1.88, its highest level in nearly two months, on Friday as a global flight from stocks has led investors to keep their cash in the greenback, seen as less risky than currencies of other nations, particularly those of developing economies, including Turkey.
|
One dollar was worth TL 1.77 on Nov.13, and it has continuously gained value against the Turkish currency since then. It hit a TL 1.90 level early October but retreated from there with the Central Bank of Turkey's intervention.
The American currency has had a stronger position not only against lira but also against Brazil's real, South Africa's rand and Russia's ruble in the past few weeks. The depreciation in the developing countries' currencies has both pros and cons for them. On the bright side, those nations' products gain a price advantage as they become cheaper in international markets, giving their exports a boost. But with too much of depreciation also comes inflation since people's purchasing power goes down in tandem with the value of the money in their pockets.
When the Central Bank of Turkey embarked on a lower interest rate/higher required reserve ratios policy late last year despite pressure from certain domestic and international pressure, most commentators supported the bank, labeling its policy as a “competitive devaluation strategy” adopted in preparation for a big shock to hit the world economy. With investor choices, however, the lira lost too much value, some observers now argue, pointing to the change of policy direction on the part of the bank which increased the overnight and late liquidity lending rates from 9 to 12.5 percent and from 12 to 15.5 percent, respectively, a month ago. The rate hikes have also impacted the yield, or interest rate, on benchmark Turkish government bonds which exceeded 11 percent in the secondary market on Friday.
Exporter unions say predictability is sometimes more important than having a price advantage in international markets and that a dollar value stable at between TL 1.75 and TL 1.80 is now the most suitable exchange rate for them.
As a result of investors' trust to American currency, gold -- normally seen as the safe have at such turbulent times for the world economy -- also lost value Friday. The price of an ounce (31.1 grams) of gold stood at $1,679.52, or nearly 1 percent lower compared to a day earlier |
Source : todayszaman.com
Hit : 670
|
|
|
|
