The Turkish Lira is on its way to the worst weekly decline since 2023 amid the country's unrest

The Turkish lira is on her way to the biggest weekly fall in her for almost two years, after a prominent political opponent’s detention raised the fear of investors. Turkish Lira’s exchange rate fell 0.5% to 38 pounds per dollar in Istanbul on Friday, bringing its losses to 3.7% over the past five days, in its worst weekly performance since June 2023. of President Recep Tayyip Erdogan. This step urged Turkish banks to sell about $ 9 billion, and the central bank suddenly raised interest rates to defend the lira. The Goldman Sachs economists, who removed the outsiders’ lira, Clemens Graf and Bashak Edizgel, said in a report that the decision of the monetary authorities in Türkiye was aimed at stopping the flow of the lira deposits. The decision to increase the lending interest rate for one night at 200 basis points came on Thursday, with the aim of enabling politics to increase the average financing costs provided to commercial banks, and to prevent further decline in the value of the lira, which would promote inflation. The bank also announced that it will be suspended indefinitely to provide financing at the lowest interest rate (standard rate) for a one -week re -purchase, which is currently 42.5%. The Central Bank decision led to relative stability in the foreign lira market; The cost of borrowing in the Turkish currency in the external market fell to 54% on Friday morning, after reaching 175% earlier in the week. On the other hand, the ‘Istanbul 100’ index closed a 0.5% decline on Thursday, a day after it scored a 8.7% loss, which wiped out about $ 10 billion in the market value of Turkish shares. While the return on Turkish government bonds reached 31.31%for ten years in Lira, it rose by 338 basis points during the week.