USD/TRY: Lira hovers near record lows on fears of BOP crisis
|- Lira hovers near the lifetime low of 7.50 per US dollar.
- Moody's has cut Turkey's debt rating to Junk and warned of a currency crisis.
Turkish lira (TRY) remains under pressure on Wednesday with Turkey teetering on the brink of a full-blown balance-of-payments (BOP) or currency crisis.
At press time, TRY is trading near 7.48 per US dollar – just short of the record low of 7.5005 per dollar reached on Sept. 14.
Turkey stares at currency crisis
On Tuesday, rating agency Moody's cut Turkey's debt rating on into junk and warned of a possible balance-of-payments crisis. It occurs when a nation cannot pay for essential imports or service its external debt repayments That often leads to a rapid depreciation of the home currency.
Turkey's current account balance registered a deficit of $1.8 billion in July, the Turkish Central Bank said on Friday. The 12-month rolling deficit was $14.94 billion, mainly on account of services outflows.
Lira has depreciated by over 25% this year.
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