On August 27th Erdem Basci, Governor of the Central Bank, stated that the was no need to raise interest rates and that people should trust him to handle the currency. If they did, he promised, they shouldn't be surprised when the Lira hit 1.92 to the $ by the end of the year. Well, it's now December 27th so how has he done? The $ is at 2.17 and he is still saying there is no need to raise base rate. So the Lira is 13% weaker than his prediction and a whopping 40% down on the TL/$ rate this time last year. I believe Turkey buys its oil and gas in dollars so, even without taking increasing international prices into account, Turkey is paying 40% more for its energy. Earlier this month the Central Bank threw $900 million at the problem and the Lira fell by (only!) 3%. Not surprising your petrol went up by 3% Lance. For those holding or getting income in £ then it's good in the short-term; but prices will be going up more rapidly.
