Turkish Lira may continue to decline even further

The Turkish Lira continues to lose value, and will probably keep losing value throughout the coming year, economists say. 

What does this mean for us?

My expenses continue to increase while my income doesn’t – payment for petrol by itself is more than I can afford!” were the words used by a worker from the legal sector who earns the minimum wage.  This angry person spoke of her difficulties faced as the lira continues to decline in value.

Since May 23, 2019, there has been a 13 per cent increase in the cost of living with 11.6 per cent of it from last year, according to the Ministry of Economy and Energy.

What will happen to the lira?
In the medium and long term, the Turkish lira is likely to continue to lose value against major currencies. For consumers, this means spending more. This is because inflation is still high in Turkey, according to consultant Giles Cattermole.

“Inflation in Turkey has been running at around 11 percent per year; for the US dollar, it’s at around 1.5 percent per year. So long-term, we would expect the Turkish lira to devalue against the US dollar at around 9.5 percent per year. If those inflation rates continue -- and economists expect that they will -- we would expect the lira devaluation to continue at that rate.”

Source: Cyprus Online Today