The U.S. dollar hit a three-week low Monday against the Turkish lira following a delayed interest rate hike by the Fed in the world’s largest economy.
The Turkish Central Bank's decision to hold interest rates around 7 percent and the international rating agency Fitch’s recent decision to affirm the country’s long-term foreign Issuer Default Ratings at BBB- with a stable outlook, also led to the dollar's loss against the lira.
The dollar dropped from 2.5760 lira on Monday to 2.5446 lira at 16.40 p.m. Turkish time (1440GMT), the lowest since late March 4.
On March 19, the U.S. Federal Reserve removed the word "patience" from its regular statement. The Fed's language was seen as an indication that the central bank would not raise interest rates for at least a few months.
Fitch affirmed Turkey's credit rating at BBB- outlook stable on Friday. The agency said public finances in Turkey remain robust with no sign of fiscal slippage ahead of general elections in June.
On March 17, the Turkish Central Bank held all key interest rates unchanged. The one-week repo rate stayed at 7.5 percent and the overnight lending rate was 10.75 percent.
Meanwhile, the U.S. Dollar Index, which measures the strength of the dollar against six other major currencies, was also down slightly to 97.10 after Friday’s move.
The price of gold was affected by the change in interest rate expectations, sinking to $1,183.21 per ounce on Monday from $1,184.60 on Friday.
