The Turkish Lira’s ratio to the U.S. dollar rose to its highest level in six months amid increasing demand for the U.S. currency, after members of the U.S. Federal Reserve upgraded their interest rate estimates.
On the first trading day of the week yesterday, the lira-dollar exchange rate climbed to 2.247 at 12:05 p.m., from the 2.225 ratio recorded just before the U.S. Federal Open Market Committee (FOMC) meeting.
“The decisions that the committee makes about what is the appropriate time to begin to raise its target for the federal funds rate will be data-dependent,” Fed Chair Janet Yellen said in a press conference following the FOMC meeting.
Her comments suggested that the Fed may increase interest rates sooner than
expected if the U.S. economy proves to be stronger than anticipated.
Gold also slid to its weakest since early January and silver to a four-year low as Fed speculation fuelled selling of precious metals.
Meanwhile, the Fed members’ average projection for the rate was 1.375 percent up to the end of 2015, while it had been placed at 1.125 percent in previous forecasts, indicating that the pace of interest rate hikes would be quicker than anticipated.
After the surge in lira-dollar rates, markets in Turkey will closely watch statements from the Central Bank of Turkey’s Monetary Policy Committee, due on Sept. 25.