The graph below is the exchange rate of Turkish Lira over US dollar (TRY/USD) between January to September 2018. At the beginning of the year, the exchange rate was 3.776 lira per dollar. However, on 13^th August Turkish Lira jumped to 6.9025 lira per dollar, a historic high against the dollar.

1. Was it an appreciation or depreciation of Turkish Lira (TRY) in 2018? Calculate the percentage change of TRY value when the exchange rate went from 3.776 to 6.9025.

b.What were the main reasons for the dramatic change of TRY in 2018? (2.5 marks)

c.What did the Turkish central bank do to try to stabilize their currency value? (1 mark) Do you think their measures were successful in the long run and why? Explain the reasons for your answer. (3.5 marks)

7.0 6.5 form 6.0 - 5.5 50 4.5 4.0 3.5 2018 Feb Mar May Jun Jul Aug Sep