Turkey’s CPI-based Real Effective Exchange Rate (REER) index rose to 69.03 from the record low of 61.49 (revised) posted in September, central bank data showed on November 6.
The index stood at 85.19 at the end of 2017. In January, the index edged up to 85.87 but it then registered declines at an escalating pace across the following eight months. The first all-time low level seen this year occurred in March.
Notably, the October reading is still below July’s 75.93.
A higher REER points to the Turkish lira (TRY) gaining value in real terms against foreign currencies while a decline in the index indicates it has lost real value.
The TRY was trading at 5.3568 against the USD, weaker by 0.87% d/d, as of 16:00 Istanbul time on November 6.
The TRY’s weakest ever level against the dollar, namely TRY7.24, was recorded on August 23.
Annual inflation in Turkey moved up to 25.24% in October from 24.52% in September, according to figures from the Turkish Statistical Institute (TUIK) announced on November 5. It was posted as the highest level on record since the end of 2003 and slightly exceeded expectations.
Producer prices lost pace in October but PPI-led cost pressures kept to a strong trend, the central bank said on November 6 in its regular monthly price developments note.