Turkish economic confidence resilient to lira’s woes – official data

Economic confidence in Turkey dipped slightly on a monthly basis in November but remained higher than a year ago even after a sharp decline in the lira’s value, according to official data.

The index of confidence fell to 99.3 this month from 101.4 in October, the Turkish Statistical Institute said on Monday. The index, which stood at 95.9 in November last year, is made up of five surveys gauging sentiment among consumers and the retail, services, manufacturing and construction sectors published last week. Three of the surveys posted increases.

The Turkish lira slumped to a record low of 13.52 per dollar on Nov. 23, taking a decline this year to more than 40 percent. It stood at 9.6 per dollar on Oct. 31 and 8.88 per dollar at the end of September.

The lira’s latest losses were sparked by a pledge by President Recep Tayyip Erdogan to win an “economic war of independence” against high interest rates – the central bank has cut rates to 15 percent from 19 percent since September even as inflation accelerated to almost 20 percent.

Businesses have reported difficulty in agreeing contracts for orders in Turkish lira amid volatility in the currency. The Turkish Industry and Business Association (TÜSİAD) warned earlier this month that the government should guarantee the independence of institutions such as the central bank to ensure sustainable economic growth.

The lira was trading down 1.4 percent at 12.59 per dollar at 12:39 p.m. local time in Istanbul on Monday.

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