As Turkish Lira Reaches All-time Low, Savvy Tourists Plan Vacations In Türkiye
Türkiye’s national currency, the Turkish lira, has hit its lowest rate in years, raising questions about its impact on the country’s tourism industry.
The central bank of Türkiye has made the decision to not inject more international exchange, to stabilize the exchange rate. Currently, the lira is trading 26.10 against the US dollar, experiencing a 28% loss in its value this year.
This decline can be attributed to the recent regulation in the banking industry, which was intended to support the national currency. In response, the regulator increased rates by 650 basis points to 15%
To further exacerbate the situation, the Central Bank of the Republic of Türkiye announced that it would no longer use foreign exchange reserves to maintain the exchange rate. Over the past 18 months, Türkiye put in $200 billion to support the lira.
This decision has resulted in a 21-year low in net international reserves, which currently stand at $2.33 billion as of May 12. These reserves have been significantly reduced due to the surge in foreign exchange demand leading up to elections.
The central bank claims that these recent measures aim to promote market freedom and ensure stability. A senior official stated that the bank has adjusted its foreign exchange policy and is no longer intervening in the exchange rate by selling foreign currency.
As the Turkish lira’s value plummets, it remains to be seen whether this will lead to an unexpected boom in Türkiye’s tourism industry – the US dollar now buys more than ever in Istanbul.