The Turkish lira fell to a new record low level after the signs for economic contraction in the third quarter. Moreover, a government official denied any interventions in resolving the collapse of the currency. The Turkish lira fell by 0.6%, which is the sharpest rate of decline among its competitors from emerging markets to a record level of 3.1853 TRY/USD.
The industrial production in Turkey recorded an unexpected drop in September, showed government data released today. Therefore, some analysts revised downwards their expectations for economic growth. There are forecasts and signs for possible contraction of gross domestic product during the third quarter.
The deteriorating indicators come in an environment of nervous markets, as politics in Turkey is becoming more unpredictable. On Friday, for example, they were detained leader of the second largest opposition party. Since July 15, when there was an unsuccessful coup attempt, the country’s acting emergency, and over 100,000 people were arrested or lost their jobs.
The main trend in the economy is definitely weak. It seems very likely that GDP shrank on a quarterly basis in the third quarter.
Since the end of 2015 the Turkish lira depreciated by 8.1% and was the second worst performing currency from emerging markets after the Argentine peso. Turkish lira is directed also to a fourth consecutive year of decline. However, according to Economy Minister the possible intervention in currency markets would be falling into the trap.