Turkish Lira plummeted to a record low of 13.44 compared to the dollar on Tuesday
The recent sell-off started after Turkish President Recep Tayyip Erdogan defended the country’s central bank’s efforts to cut interest rates amid rising double-digit inflation. From his point of view, the move is part of an “economic war of independence.” So far, Erdogan has fired three central bank chiefs in the past two years over policy differences.
At the moment, inflation in Turkey is close to 20%, meaning that prices of basic goods have soared, and their local currency salaries are significantly devalued.
The Turkish Lira’s latest sharp downturn began after the central bank cut rates by 100 basis points to 15%. Since September, it cut rates by 400 basis points.
Despite the recent slump, the Turkish Lira started to recover after its historic slide. On Wednesday, November 24, it traded at 11.85, firming 1.9%.
Since the beginning of the year, the Turkish Lira has lost almost 40% of its value against the dollar.
Sources: Aljazeera.com, investing.com