According to Reuters, the Turkish lira has fallen to a new record low against the US dollar.
This came after President Recep Tayyip Erdogan fired three members of the Monetary Policy Committee of the Central Bank of Turkey last night and appointed two new members.
Economists saw the move as new evidence of political intervention by Erdogan, who called himself an “enemy of interest rates” and often called for them to be lowered.
As a result, the Turkish lira weakened to a historical level – about 9.19 lira per US dollar.
Since the beginning of the year, the currency of our southern neighbor has depreciated by almost 19%, mainly due to concerns about the monetary policy of the Central Bank, which Erdogan continues to put pressure on.
The Turkish lira depreciated against the euro to a record low – at the beginning of today’s trading, it fell to 10.65 pounds per euro.
In September, the Central Bank unexpectedly lowered its key interest rate from 19% to 18%, despite annual inflation of almost 20%. This led to a new sell-off of the pound against the US dollar, which also rose against other major currencies.
Erdogan has made a number of changes to Turkey’s central bank in recent years. In the last two and a half years alone, he has fired three bank managers over political differences. This caused a devaluation of the local currency and seriously undermined the credibility and predictability of the country’s monetary policy.
Last month, core inflation peaked in 2.5 years at 19.58%.