The Turkish lira has recorded a downtrend in its value in the Thursday trading session. The data shows that the value of the lira ended up falling to a low of 18.9620 against the greenback.
The historical data shows that this is the record low level that the lira has hit compared to the greenback.
The fall comes to the Turkish lira because of the uncalled-for disaster that hit Turkey in the month of February. The entire world was shaken when the breaking news was shown that Turkey had faced a massive earthquake.
Due to the earthquake, the number of casualties rose to an unimaginable number. Unfortunately for Turkey, it ended up impacting the economy of the country which was already very down.
More Uncertainty Due to Elections
Another factor impacting the Turkish lira is also the electoral activities. As of now, parliamentary and presidential election campaigns are taking place in the country.
The elections are scheduled to take place on May 14, 2023, in Turkey. Despite the elections coming near, the parties are not able to launch their election campaigns to their full potential.
This is because the country is dealing with the aftereffects of the earthquakes that destroyed cities and buildings in a matter of minutes.
According to the opposition, they want the elections to go on so they can prove they are right and de-seat Tayyip Erdogan.
As claimed by the opposition, Erdogan has been running the country in unconventional ways. They want to change this for good and want to reinject the country with orthodoxy.
Statement by the Turkish Treasury
On Thursday, the Treasury of Turkey made a statement about the money they had borrowed. They revealed that they had borrowed funds in the form of a Eurobond issue.
The funds they borrowed were worth $2.25 billion and they would mature by the end of 2029. They revealed that they were all set to more than double the funds they had borrowed from the markets.
According to the Treasury, they were on the right track to increase the value to $5 billion in the ongoing year.
Yield Percentage Offered to the Users
The officials at the Turkish Treasury revealed that they had implemented a reduction in the yield for the investors. Previously, the yield was at 9.75% but they have reduced it by 0.25%.
Following the reduction, the yield percentage for the Eurobonds has come down to 9.50%. The reduction was reportedly announced by the officials in January.
The Treasury also provided the reason why they had to reduce the yields for the Eurobonds. They saw a tremendous amount of demand for the bonds, which was triple the size of the amount they had issued.
Therefore, they had to reduce the yield percentage to accommodate as many requests as possible.
Out of the total bonds issued, over 20% were bought by investors based in the United States. When it comes to investors from the United Kingdom, more than a third of the amount was issued.
Lira Performance since August
It was since August that the trading price of the lira had been stable and was doing well in the forex market. It was all thanks to the authorities in Turkey that had been micromanaging the forex market.
It was due to their strong input and contribution to the forex market that the value of the lira was stable all this time.
However, as the country faced a major earthquake at the beginning of February, its reserves started to shrink. From the first earthquake until now, the country’s overall reserves have declined tremendously.
As reported, the reserves have lost more than $9 billion and things are still not looking well.
In the year 2021, the value of the lira had fallen by 44% against the dollar and in the year 2022, the loss had shrunk to 30%.
