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The Turkish lira plunged to around 3.5% on Thursday, abandoning all of its gains this year as US bond yields continued to rise.
The currency was at 7.3650 against the dollar at 7:01 p.m. GMT, down from 7.17 at Wednesday’s close. And earlier, it fell 3.6% to 7.44, the 2020 closing level.
The yield on 10-year US Treasuries jumped to over 1.6% yesterday, prompting investors to sell emerging market currencies, falling between 2-4%.
The lira has risen by more than 20% since November, after the change of finance minister and central bank governor.
However, the currency reversed course this week, ending a 3-month rally after the government defended the policies of former finance minister Baraat Al-Albayrak, causing the lira to fall 5% against at the close of Friday.
Berat Albayrak, former Turkish Minister of Finance
Albayrak oversaw unconventional policies, which included selling state banks for around $ 130 billion during his two years in power, which drained Turkey’s foreign exchange reserves. The currency has lost about half of its value over the same period.
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