Turkish currency hits record low after slew of bad data

Sunday 09/10/2016
Under pressure

ANKARA - The Turkish currency struck a record low on Wednesday after data showed a larger-than-expected widening of the country's current account deficit.

The lira hit 3.0974 to the US dollar at one point in the afternoon, losing more than 0.3 percent of its value against a rising greenback. It edged back to 3.0868 in the evening.

The lira has recently been losing value, after having rallied following a 5 percent crash on the July 15 attempted coup.

The Turkish currency has come under pressure after a slew of data showing the impact of the failed coup, including Wednesday's current account deficit numbers showing it was wider than expected.

The current account account balance in August produced a deficit of $1.78 billion on a month-by-month basis, according to the Turkish Central Bank.

The shortfall was "worse than the consensus of $1.5 billion and worse than our forecast of $1.1 billion", chief economist Ozgur Altug at BGC Partners in Istanbul said in a note.

Altug blamed the decline in tourism revenues and rise in energy prices for the deterioration, adding that the pace was also "slightly faster than what everybody assumed".

Earlier this month Turkey's government cut its 2016 growth forecast from 4.5 percent to 3.2 percent.

Investors have been rattled over the political instability in Turkey despite initial unity between the government and the main opposition party, Republican People's Party (CHP) in the weeks after the attempted putsch.

This month the government extended the state of emergency for another 12 weeks -- which the CHP opposed.

The pressure on the lira comes as the dollar has been rising against most currencies as investors speculate about the US Federal Reserve raising interest rates by the end of the year.