Turkish lira continues to melt

The TCMB has published its "Real Effective Exchange Rate Developments" report for November. The report stated that the real effective exchange rate index, based on 2003=100, fell by 0.07 points from the previous month to 71.79 on a CPI basis. In October, this index was at the 71.86 level.

The real effective exchange rate index calculated on the basis of the Domestic Producer Price Index (D-PPI) decreased by 0.05 points in November to 95.47. Compared to the same period last year, the value of the Turkish lira decreased by 0.34 points on a CPI basis and by 1.52 points on a D-PPI basis.

According to the TCMB's assessment, the decline in the REER index was caused by the nominal exchange rate increase being higher than the increase in the CPI. Against the Turkish lira, the dollar and the euro gained an average of 1.08 percent and 0.30 percent in value, respectively, compared to the previous month. In the same period, the CPI increased by 0.87 percent, while the D-PPI increased by 0.84 percent.

The report also stated that Turkey's CPI contributed to the increase in the index, but that changes in the World CPI Basket and the Nominal Exchange Rate Basket created a downward effect on the index.

News Source: 12punto