The Turkish lira has collapsed record-breaking.
Nov 07, 2023

The Turkish lira has collapsed record-breaking.

The Turkish lira has collapsed record-breaking. During trading on November 7, the Turkish lira fell in price against the dollar on a record — at the lowest point, its value reached the lowest ever 28.6 lira per dollar, according to trading data on the international forex market.

At the time of writing, the currency bounced slightly from the low, reaching 28.49 lira. Since the beginning of the day, the lira has lost 0.2 percent in price.

At the beginning of the summer, the dollar cost about 21 lira, and at the beginning of the year — 13.5 lira. Along with the Russian ruble and the Argentine peso, the Turkish lira has been among the three worst emerging market currencies since the beginning of the year.

Experts note that the long-term policy of President Recep Tayyip Erdogan led to the collapse of the national currency. The leader adhered to an alternative economic theory, according to which a reduction in the interest rate helps to stop price growth. Despite the warnings of economists, the Turkish leader steadily demanded easing of monetary policy, but contrary to his ideas, there was no slowdown in inflation, and the Turkish lira weakened on record. After winning the next presidential election, Erdogan changed the Central Bank team, headed by a Princeton graduate and former top manager of the largest American banks, Hafiz Gaye Erkan.

After the appointment of the end of June, the discount rate in the country increased from 8.5 to 30 percent, and at the end of October, the Central Bank of Turkey raised it to 35 percent. According to current forecasts, inflation inflation will rise to 68 percent by the end of the year. Nevertheless, such an indicator will be an improvement compared to last year, when the price increase reached 85 percent.

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