Turkey’s lira is rallying for the first time in four days this morning, shrugging off a weaker than expected performance in the country’s industrial sector.
The currency has gained as much as 0.5 per cent against the dollar at the start of Monday’s trading after spending most of last week on the back foot.
At publication time, the lira is 0.36 per cent stronger against the greenback, picking up pace after official statistics showed industrial production rose by a disappointing 3.5 per year on year, down from 6.7 per cent in April. The reading was lower than an average forecast of 5 per cent growth compiled by Bloomberg.
Industry accounts for just over a third of the Turkish economy which has bounced back strongly after contracting in the third quarter of the year.
Having started 2017 as the world’s worst performing major currency, the lira had gained poise to wipe out its losses by June. But investors have begun to sell the currency in recent weeks on concerns over febrile geopolitics in the region.
Turkey has opted to support Qatar in a diplomatic spat between the Gulf nation and a group of countries led by Saudi Arabia.
On the domestic front, the country’s main opposition party led a rally of over 100,000 people in Istanbul yesterday. Many had walked over 400km from Ankara to Istanbul to protest against the ruling AKP government’s crackdown on dissent.
Dutch bank Rabobank has said it may have to abandon its “cautious optimism” on the lira, which it forecasts will hit TRY3.40 against the dollar by the end of the year.
The lira is trading at TRY3.6010 at publication time – up 0.37 per cent on the day.