Turkish Lira Falls As Erdogan Watches Country Doomed In Slow Poverty

Turkish -After Lebanon, it’s Turkey on the lines to face a dropped currency which is going to be of no use, soon. The Turkish currency Lira has hit its lowest ever at 11 against the US dollar for the first time in Turkish history. The currency is said to have lost its value by more than 30 percent this year.

Debates with the Central Bank did not result in any constructive. Instead, it landed up cutting bank rates by another 100 bps, which sent the Lira plummeting down even more.

Meanwhile, Turkish President Recep Tayyip Erdogan repeated his constant fight against high-interest rates and serious levels of inflation. His empty words received great applause, except by the Minister of Finance and Treasury Lutfi Elvan.

Strangely, the borrowing costs have been too high for Turkey. This has led to a slowdown in credit growth that has brought about elevated inflation that has then constrained consumer spending growth prospects.

Related Posts

According to Nikolay Markov, senior economist at Pictet Asset Management in Switzerland, “The ongoing depreciation of the Lira led to a further increase in imported inflation, to higher producer prices inflation, all of them feeding into higher domestic consumer price index inflation that requires a tighter monetary policy.

As the central bank is cutting rates, it amplifies the negative feedback spiral between Lira depreciation, higher imported inflation triggering further Lira depreciation and a further increase in imported inflation which becomes an ever ending-process.” The currency that is supposed to act as a buffer has therefore lost its worth to do the same.

It is worth noting that Turkey is a net debtor, and is therefore heavily dependent on foreign investors to fund its current account deficit. Markov has further added, speaking to a local media outlet, “The inability of the central bank to take the right policy decisions is doing more harm than good to the economy. It may spark a further loss of confidence among foreign investors, which is bringing Turkey closer and closer to a full-blown balance of payments crisis.”

Desk Writer

Human stories, politics, diplomatic developments, climate and daily updates – all are assured to be at your access as we strive to bring the best news to you.

Recent Posts

Trump vs. Panama: President Mulino Responds to US Threats Over Canal Control

Jose Raul Mulino the President of Panama strongly rejected U.S. President-elect Donald Trump's comments about taking back control of the… Read More

December 23, 2024

Louise Delos Reyes Says ‘Yes’! Actress Reveals Stunning Engagement in London

Louise Delos Reyes is officially engaged! The actress-turned-pastry chef said "yes" to her longtime boyfriend, Jino Brion during a dreamy… Read More

December 23, 2024

Can Ukraine Join NATO? Zelenskiy Pushes for Global Stability Through Alliance

Ukrainian President Volodymyr Zelenskiy said that membership of Ukraine in NATO is "achievable" goal but this will require persistent effort… Read More

December 22, 2024

UAE-Funded Orphanage Opens in Ethiopia, Transforming Lives in Oromia

Ethiopian Prime Minister Dr. Abiy Ahmed recently inaugurated a state-of-the-art orphanage in Oromia. This orphanage is built with the support… Read More

December 21, 2024

Russia-Ukraine Conflict: Drone Strikes Cause Disruptions in Kazan, No Casualties

The airport in the Russian city of Kazan reopened on Saturday. This airport reopened on Saturday after a temporary closure… Read More

December 21, 2024

George Eastham, England’s 1966 World Cup Winner, Passes Away at 88

England's 1966 World Cup Winner, George Eastham has passed on aged 88 years. Blackpool-born forward, who played 19 times for… Read More

December 21, 2024

This website uses cookies.

Read More