Turkish currency continues decline; takes record low plunge under Erdogan’s monetary ‘strategy’

Turkish currency continues decline; takes record low plunge under Erdogan's monetary 'strategy' 1

The course of the Turkish national currency remains a major challenge for the Turkish President’s finance team, as the lira plunged to all-time lows. It is a “minefield”, as inflation has soared, negatively affecting the cost of servicing loans to households and businesses that have borrowed heavily in foreign currency – and especially in dollars.

A Reuters report on Friday, citing three different sources, said the Turkish president was losing confidence in the country’s central bank governor, Sahab Kavtsioglu, less than seven months after taking office. This caused the lira to plunge to historically low levels, reaching 9.97 against the dollar.

Erdogan’s spokesman, Fehrettin Altun, then rushed to refute the reports, causing the currency to rise slightly, but then slipped again near record lows. This week will be crucial now for the currency as it will be seen if the psychological ratio “9 against the dollar” will be broken or if any recovery will be attempted. This year alone, the Turkish lira has lost 20.5% of its value against the US currency.

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