The Turkish lira is struggling for direction after falling to fresh record lows this week. The lira is trying to muster up some momentum on increasing foreign exchange reserves and the government pledging to support the economy. Can the lira extend its recovery in the final quarter of 2021?

For the seventh consecutive week, the central bank’s forex reserved increased, totaling $83.2 billion in the week ending October 1. While gross forex reserves are at historic lows, they have risen to a 20-month high.

Earlier this week, consumer and producer inflation came in hot for September. According to the Turkish Statistical Institute (TSI), the annualized inflation rate advanced to 19.58% last month, while the producer price index (PPI) clocked in at 43.96% year-over-year in September.

In a speech to party members on Thursday, President Recep Tayyip Erodgan acknowledged that the country faces economic difficulties, but vowed that Ankara will overcome its problems, pointing to decent economic data in the first and second quarters.

“Turkey can look toward its future at a time when many countries, including developed countries, are experiencing food supply concerns. That doesn’t mean there is no problem. Of course, we have problems, we know what causes them and how to solve them,” he said. “The significant growth figures in the first and second quarters of this year indicate that we are heading in the right direction.”

Erdogan noted that his administration resuscitated the agricultural sector, understanding that it is a critical industry for the nation’s recovery.

“We have given all kinds of support. We give and we will give. We have reached the highest levels in the history of the republic by increasing its agricultural output to 337 billion Turkish Liras and its exports to $20 billion,” he stated.

The USD/TRY currency pair dipped 0.02% to 8.8782, from an opening of 8.8794, at 20:55 GMT on Thursday. The EUR/TRY slipped 0.06% to 10.2574, from an opening of 10.2646.