Turkish consumer confidence drops to 12-year low after lira slumps

Turkey’s consumer confidence fell in October to the lowest level since the global financial crisis more than a decade ago.

Confidence among consumers dropped to 76.8 this month from 79.7 in September, according to a monthly index published by the Turkish Statistical Institute on Thursday. Sentiment was the worst since February 2009.  Any reading below 100 reflects pessimism.

Inflation of almost 20 percent and a slump in the value of the lira – the currency hit a record low of 9.38 per dollar this week – is eroding Turks spending power.

The decline in consumer confidence was led by a deterioration in householders’ expectations for the general economic situation in the country. That gauge fell to 74.2 from 79.3 in September.

The lira was trading down 0.6 percent at 9.26 per dollar on Thursday. The currency has lost about 20 percent of its value this year. The losses have deepened since the central bank unexpectedly cut interest rates to 18 percent from 19 percent in September despite an uptick in inflation. It is meeting again on Thursday to decide on rates.

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