The Turkish lira is rising against its US counterpart on Thursday, buoyed by another increase in foreign exchange reserves. The lira has been on a tear since November, rising nearly 9% and extending its rally into 2021. The lira had strengthened to as much as 7.01 against the greenback before paring some of its gains.
For the third consecutive week, the central bank’s forex reserves topped $50 billion. In the week ending February 5, Ankara’s gross foreign reserves reached $54.366 billion, up from $53.367 billion in the previous week.
This is the highest level since June 2020. Still, the nation’s reserves are half of what they were in 2017.
In other data, the unemployment rate edged up to 12.9% in November, up from 12.7% in October. But this is down from 13.3% at the same time a year ago. Overall, the number of jobless decreased by 303,000 to 4.005 million, while those employed declined by 1.103 million to 27.066 million.
Employment slumped in agriculture, industry, services. The only sector to record a substantial increase was construction, with 101,000 new jobs. The youth jobless rate continues to dampen the economic rebound, rising to 25.4%.
That said, the jobless situation has been improving since the aftermath of the coronavirus pandemic, with COVID-19 cases sliding to a seven-day average of 7,965, from a peak of more than 32,000. In total, Turkey has reported 2.56 million cases and a death toll of more than 27,000.
Meanwhile, according to Bloomberg, using data from the central bank, Turkey’s economy might have expanded as much as 2.5% in 2020, beating many other major economies that have been decimated by the coronavirus public health crisis. Most of last year’s gains may have occurred in the fourth quarter when the gross domestic product (GDP) was forecast to grow 8%.
The biggest challenge for the country will be reining in inflation. Central bank head Naci Agbal has confirmed that its top priority is price stability after inheriting double-digit price inflation following months of slashing interest rates.
The USD/TRY currency pair fell 0.37% to 7.0352, from an opening of 7.0612, at 16:53 GMT on Thursday. The EUR/TRY dropped 0.3% to 8.5315, from an opening of 8.5564.