Turkish Lira Steady Following Unchanged Interest Rate

The Turkish lira strengthened slightly to 13.35 per USD after the Central Bank of Turkey held its key borrowing costs steady for the first time since September. The central bank has slashed its benchmark rate by 500bps in the previous 4 meetings to support exports and growth, pressured by President Tayyip Erdogan despite a plunging lira and surging inflation. Data showed recently that the consumer price inflation hit a 19-year high of 36.08% in December, the highest under President Erdogan's rule and well above the bank's target of 5%. In the meantime, the Ministry of Finance announced that TRY 163 billion has been deposited in accounts under the government’s scheme that protects lira deposits from the currency’s volatility.