In Turkey, the currency crisis is noticeably worsening. The Turkish president is sticking to his policy of keeping interest rates low. In the oil markets, concerns about demand are weighing on prices.
The rapid decline in the Turkish lira continued on Friday. Since the beginning of the year, Turkey’s currency had lost more than half of its value. The dollar and euro hit record highs again at 17.066 and 19.4159 lira, respectively. President Recep Tayyip Erdoĝan will apparently not be dissuaded from his course of keeping interest rates low despite high inflation, said financial expert Patrick Curran from research house Tellimer. This threatens to worsen the currency crisis to a point where there is no going back.
Meanwhile, the euro fell against the dollar, was able to and slid below the $ 1.13 mark. The common currency fell by half a US cent to $ 1.1277. At the end of a week with an unusually large number of central bank decisions, the Munich-based Ifo Institute published its business climate index. In view of new corona worries about the Omikron variant, the mood in the German economy clouded over significantly. “The warnings of a worsening corona wave are getting louder as the Christmas holidays draw closer,” said analyst Vandana Hari from research house Vanda Insights. The surprisingly sharp decline in the Ifo index fitted into this picture. “The mood in German companies is approaching the frost zone at the end of the year,” said Christian Lips, chief economist at Nord LB.
In the crude oil markets, too, economic worries due to the rising number of infections weighed on prices. For example, Brent crude oil from the North Sea was two percent cheaper to $ 73.47 per barrel. US oil WTI was 1.9 percent less than the previous day at $ 70.99. According to stockbrokers, investors feared that a new wave of infections could weaken the economy and thus oil demand.