Ella 
A guide to understanding the exchange rate and its impact on international trade. The Turkish Lira is the legal tender of Turkey, and the British Pound is the currency of the United Kingdom. The exchange rate between these two currencies is a crucial factor in determining the economic relationship between the two countries. In this article, we will explore the current exchange rate between the Turkish Lira and the British Pound, factors that influence the exchange rate, and the impact of the exchange rate on international trade.
Current Exchange Rate
As of June 26th, 2023, the exchange rate between the Turkish Lira and the British Pound stands at 0.084 GBP to 1 TRY. This means that one British Pound can be exchanged for approximately 11.91 Turkish Lira. This exchange rate is subject to fluctuations due to various factors, including global economic developments, political events, and monetary policies.
Factors Influencing the Exchange Rate
Several factors influence the exchange rate between the Turkish Lira and the British Pound. The most significant factors include:
1. Interest Rates: Higher interest rates tend to attract foreign investors, leading to an increase in demand for the currency and appreciation of its value. In contrast, lower interest rates reduce demand, leading to depreciation.
2. Inflation: High inflation rates erode the value of a currency, reducing its purchasing power and causing it to depreciate.
3. Political Stability: Political instability and uncertainty can negatively affect a country’s currency value, leading to depreciation.
4. Economic Growth: Countries with robust economic growth rates tend to have stronger currencies due to increased demand for their goods and services.
5. Balance of Trade: A country’s balance of trade, or the difference between its imports and exports, affects its currency value. A positive balance of trade leads to an increase in the value of a currency, while a negative balance of trade leads to depreciation.
Impact on International Trade
The exchange rate between the Turkish Lira and the British Pound has a significant impact on international trade between Turkey and the UK. A weaker Turkish Lira makes exports cheaper, leading to increased demand for Turkish goods and services in the UK. At the same time, imports from the UK become more expensive, which can negatively impact UK businesses.
Conversely, a stronger Turkish Lira makes Turkish imports more affordable for UK businesses but makes Turkish exports more expensive, potentially reducing demand for Turkish goods and services. This highlights the importance of understanding and managing exchange rate risk when engaging in international trade.
Conclusion
The exchange rate between the Turkish Lira and the British Pound is a critical factor that influences the economic relationship between Turkey and the UK. Understanding the current exchange rate, factors that influence it, and its impact on international trade is crucial for businesses and policymakers alike. By effectively managing exchange rate risk, businesses can maximize their profits and mitigate potential losses, while policymakers can develop policies that promote economic growth and stability.
