The Turkish lira strengthened against its US counterpart on Thursday as foreign exchange reserves and economic optimism lifted the currency. The lira has enjoyed a strong week and has stabilized this month following a 20% collapse since the end of March. Can the lira bounce back and strengthen below the 8.00 mark before the end of the year?
Turkey’s Industry Minister Mustafa Varank spoke at the opening ceremony at an aluminum plant in the nation’s industrial province of Kocaeli. The government official projected that the nation’s economy will record unprecedented growth at a time when the world will recover from the coronavirus pandemic.
Citing last year’s 1.8% gross domestic product (GDP) gain, despite the rest of the world contracting, Ankara contended that industrial production, demand for investment, and the nation’s exports will perform better than most economists anticipate.
Treasury and Finance Minister Lütfi Elva told the local CNN economic growth could reach as much as 6% in the first quarter of this year, pointing out stellar exports and industrial output.
Economists project that the GDP will expand by 4.8% on average in 2021.
Foreign investors remain dedicated to the Turkish economy, with assets abroad topping $250.2 billion in the first quarter, although this figure was calculated before President Recep Tayyip Erdogan ditched his third central bank chief in a year.
The second quarter could offer a better gauge of foreign investor confidence in the Turkish economy.
On the data front, foreign exchange reserves rose for the second consecutive week, totaling $49.591 billion in the week ending May 14. This is up from $48.858 billion in the previous week. Still, foreign reserves have remained below $50 billion since the end of March.
In other data, automobile production exploded 845% year-over-year in April. But this figure is skewed because the economy had essentially shut down last year at this time, so these numbers will be a lot larger than market analysts are accustomed to.
The USD/TRY currency pair tumbled 0.37% to 8.3827, from an opening of 8.4135, at 20:47 GMT on Thursday. The EUR/TRY advanced 0.06% to 10.2498, from an opening of 10.2439.