Thursday September 3, 2020
The Turkish lira dropped to a record low against the U.S. dollar on Thursday as the official data revealed increased inflation in August.
Following the announcement of year-on-year inflation of 11.77 percent, one dollar was traded at 7.44 liras in this afternoon, up from 7.38 the previous day.
Since the beginning of this year, the lira has nearly lost 20 percent of value against the U.S. currency.
According to the data released by the Turkish Statistical Institute, the increase in inflation in August was mainly driven by rising prices in "miscellaneous goods and services" by 26.99 percent year-on-year.
Prices of health-related goods and services rose by 14.68 percent and food and nonalcoholic beverages by 13.51 percent year-on-year, the data also showed.
Mustafa Sonmez, an economy writer, said on his Twitter account on Thursday that the costs of producers surged by 2.35 on a monthly basis in August with the impact of the rising foreign currency rates.
The dollar had exceeded the psychological level at the beginning of August and rose to over 7.00 liras.
"The rising costs will increase the consumer prices in the upcoming months," added Sonmez, the writer of over two dozen books about Turkey's economy and social events.
Yalcin Karatepe, a scholar from Ankara University, said the easing of the Turkish lira against the greenback has nothing to do with the "announced inflation data."
He argued that the official data do not reflect the "real inflation" in the pockets of Turkish people, which is much higher than the announced one. "No one pays much attention to that data," he tweeted.
Meanwhile, some exchange offices at a neighborhood packed with business centers on the European side of Istanbul did not allow press members to take photos of electronic exchange rate boards.
"Due to the excessive volatility, we had to increase the rate of our profit," one of them told Xinhua, without giving further details.
The coronavirus pandemic began to hit the country's fragile economy starting from March onwards, forcing numerous businesses to suspend operations.