According to Xinhua News Agency article published on March 16, 2023, the Turkish currency sank to a record low against the U.S. dollar on Thursday, trading at over 19 Turkish Lira amid local and global uncertainties.
After surpassing the resistance level of 19, one dollar stood at 19.01 liras at 2:00 p.m. local time (1100 GMT). The currency has lost about 70 percent of its value against the greenback since the beginning of 2022.
Turkish people have long been struggling against rising living costs triggered by a high inflation rate, which hit a 24-year high of 85.51 percent in October 2022.
The inflation stood at 55.18 percent in February, but the actual cost of living experienced by local people is even higher as the prices of many products at least doubled in the past year.
Murat Tufan, an analyst at Turkish broadcaster Ekoturk, told Xinhua the reasons behind the currency depreciation were twofold.
One is the uncertainty behind upcoming elections in the country, he said. "The question on everyone's mind is what will be the monetary policy of the new administration," Tufan stated, noting that such a period created significant uncertainty for the market.
Türkiye is set to hold presidential and parliamentary elections on May 14.
The other is "the crisis that Silicon Valley Bank and Credit Suisse brought," continued the analyst, "developing states, like Türkiye, are severely impacted the most when there is a crisis in liquidity-providing countries."
Shares of Credit Suisse, the second-largest bank in Switzerland, fell to a record low on Wednesday, slumping by more than 20 percent. The U.S.-based Silicon Valley Bank collapsed last week.
"Both contribute to the decline in the Turkish Lira," Tufan added.
