Dollar rises to record high compared to Turkish lira

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Dollar rises to record high compared to Turkish lira

On Monday, the dollar rose to a record high compared to the Turkish lira USDTRY, despite re-elected President Recep Tayyip Erdo and appointing a finance minister who pledged a rational economic policy.

Mehmet im ek, who had previously held the position, said transparency, consistency, predictability and compliance with international norms will be our basic principles in reaching the goal of raising social welfare.

He added: Turkey has no choice but to return to a rational basis.

In a note issued over the weekend, Goldman Sachs said the choice of im ek increased the likelihood that monetary policy will shift towards a more orthodox direction. However, im ek's appointments did little to calm forex markets as investors were also waiting to see if Erdo An would change leadership at the central bank to match the finance minister's stance.

Ten years ago, the U.S. dollar bought around two Turkish liras. Now the buck is worth more than 21 lira after global investors lost faith in Erdo an stewardship of the economy as he challenged othodoxy by claiming reducing interest rates was the way to combat inflation.

Over the last two years, Erdo has pushed the central bank to reduce borrowing costs from nearly 20% in 2021 to 8.5%, even though inflation is around 40 percent.

Reducing inflation to zero in the medium term and accelerating the structural transformation that will reduce the current account deficit are of vital importance for our country, said Imek, the chairman of the Central Bank of India.

Low inflation has encouraged local investors to buy stock to generate returns, and the BIST index, XU 100, rose 3.5% on Monday, for a gain of 99% over the past 12 months.