What was the exchange rate after 20 percent devaluation

Reference no: EM13263134

The Turkish lira (TRY) was officially devalued by the Turkish government in February 2001 during a severe political and economic crisis. The Turkish government announced on February 21 that the lira would be devalued by 20%. The spot exchange rate on February 20 was TRY68,000=1USD.

a. What was the exchange rate after the 20% devaluation?

b. Within three days the lira had plummeted to more than TRY100,000/1USD. What percentage change was this from the pre-devaluation rate?

c. Evaluate why the value of the TRY was different from the 20% devaluation sought by the government.

Reference no: EM13263134

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