The Turkish lira fell to a new record low today against the dollar, with the country’s economy under enormous pressure.
Specifically, the exchange rate of the Turkish currency fell 2.9% to 15.25 lira while recently forming at 15.2 lira. The dollar’s value against the lira has more than doubled since the beginning of the year, shaking the Turkish economy.
According to a Reuters survey, despite pushing inflation above 21%, the central bank is expected to cut its key interest rate by one percentage point to 14% later today.
The Turkish currency has been tanking as Erdogan’s reckless economic policy causes more damage, despite economists and lawmakers who are against it. The Central Bank has cut its key interest rate four percentage points in September to 15%.
Economists predict that inflation will jump to almost 30% next year, given the sharp fall in the lira, mainly due to rising import prices.
At the same time, the basic salary, with the devaluation of the Turkish lira exceeding 70% and 85% against the dollar since the beginning of the year, fell to 169 euros, when 6-7 years ago it was at 430 euros, according to with SKAI.
Opposition leader Kemal Kilicdaroglu called for immediate elections in Turkey, blaming the government and President Tayyip Erdogan for giving guarantees to people affected by the collapse of the Turkish state.
Speaking in parliament, Turkey’s Republican People’s Party (CHP) leader said the Erdogan government could not create an environment of confidence in the markets.
He added that Turkey needs a strategy rather than short-term plans and spoke of a governance problem, citing the shift of citizens to foreign currencies against the Turkish lira.
In recent hours, the Turkish lira has been recovering from a record low, following measures announced by Turkish President Recep Tayyip Erdogan, who, however, insisted he would continue the policy of low-interest rates.
The rise of the pound against the dollar since Friday exceeds 40%, as from the historical low of 18.3633 early on Monday, it reached 11.0990 on Tuesday morning. The two-day rally is the largest since 1983.
Since January, the Turkish lira has lost 57% of its value against the dollar, and for Turks, this collapse translates into an uncontrollable price spike. While the country is highly dependent on imports, primarily in the raw materials sector (materials and energy).
Commodity prices such as sunflower oil have skyrocketed by 50% in one year.