Turkey’s lira nose-dived 15% on Tuesday in its second-worst day ever after President Tayyip Erdogan defended recent sharp rate cuts, and vowed to win his “economic war of independence” despite widespread criticism and pleas to reverse course.
The lira tumbled to as low as 13.45 to the dollar, plumbing record troughs for an 11th straight session. It has lost 45% of its value this year, including a near 26% decline since the beginning of last week.
Erdogan has applied pressure on the central bank to pivot to an aggressive easing cycle that aims, he says, to boost exports, investment and jobs – even as inflation soars to near 20% and the currency depreciation accelerates, eating deeply into Turks’ earnings.
Many economists called the rate cuts reckless and urged a reversal, while opposition politicians appealed for early elections. Turks told Reuters the dizzying currency collapse was upending their household budgets and plans for the future.
Former central bank deputy governor Semih Tumen, who was dismissed last month in the latest of Erdogan’s rapid leadership overhaul, called for an immediate return to policies which protect the lira’s value.
via Reuters
