Jul 14 2018

Lira to continue sliding – Barclays Bank

Turkey’s currency will continue to sink against the dollar according to the UK’s Barclays bank, Turkish financial news website Business HT reported on Saturday.

Barclays predict that the by the end of this year’s third quarter, the dollar/lira exchange rate will reach 4.95 and by the end of the year it will hit 5.10. Barclays expect the lira will continue to weaken against the dollar in 2019, reaching 5.25 by the end of the second quarter.

The predictions come as the lira continued to slide after Turkish President Recep Tayyip Erdoğan unveiled a new cabinet last week, following his victory in last month’s presidential election.

The appointment of Erdoğan’s son-in-law Berat Albayrak as Treasury and Finance Minister, rather than more experienced figures such as Mehmet Şimsek, is believed to have contributed to the lira briefly falling to as low as 5.97 against the dollar last week, as doubts about the management of Turkey’s economy intensified.

Following his appointment Albayrak attempted to calm the markets, promising that Turkey’s central bank will remain independent and pledging to fight inflation and institute a comprehensive reform program.

Even so, ratings agency Fitch downgraded Turkey further into junk territory on Friday, citing uncertainty and fears about the economic credibility of Turkish economic policy.