The Turkish lira has lost roughly 47% of its value in the last full year, in a rout driven by Erdogan's refusal to raise interest rates.
The Turkish lira has lost roughly 47% of its value in the last full year, in a rout driven by Erdogan's refusal to raise rates as inflation consistently climbed.
The currency's turbulence has hit Turks hard, as the value of their salaries dropped and living costs dramatically increased.A money changer holds Turkish lira and U.S. dollar banknotes at a currency exchange office in Ankara, Turkey December 16, 2021.Inflation in Turkey has increased to a fresh 20-year high, a higher than expected 54.44% for February, as thePrices of consumer goods rose 4.81% on the previous month, according to the Turkish Statistical Institute on Thursday.
Record energy imports in January helped Turkey's trade deficit soar, and commodity prices continue to mount amid supply concerns and the Russian invasion of Ukraine. Brent crude is up 53% year-to-date. Turkish President Recep Tayyip Erdogan has prioritized credit and exports, while consistently arguing — against all economic orthodoxy — that raising rates actually worsens inflation rather than taming it.The Turkish lira has lost roughly 47% of its value in the last full year, in a rout driven by Erdogan's refusal to raise rates as inflation consistently climbed. The currency's turbulence has hit Turks hard, as the value of their salaries dropped and living costs dramatically increased.
The country's January inflation figure was 48.7%, already then the highest in two decades. In mid-February, Erdogan vowed to "break the shackles of interest rates" and lower inflation to single digits. He has blamed Turkey’s currency problems on "foreign financial tools."
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