The Turkish lira has fallen 0.5% against the US dollar since Friday, hitting its lowest level in nearly two months, which will lead to higher inflation, which already hit nearly 70% in April.
This poses a major challenge for the Turkish government, which is trying to maintain the value of its local currency in amid disputes with opposition parties seeking to overthrow the current government in next year’s presidential and parliamentary elections.
Turkish economic analyst Cüneyt Akman said that “the depreciation of the Turkish lira against foreign currencies mainly affects vulnerable groups of society, in especially the poor, especially because of the prices of materials prime base have multiplied several times globally against the backdrop of the Corona pandemic and geopolitical problems “.
The analyst added to “Al Arabiya.net”that” the prices of materials prime basically they multiplied by 4 times in Turkey. In addition to this, this increase is a global problem and for external reasons, but this increase in Turkey has another reason, which is the drop in the value of the local currency against the US dollar. “
He added: “The government is trying to prove the value of the Turkish lira, but this solution is not sustainable, and it is restoring monetary policy”, stressing that “the decline in the lira, if it continues like this in the next period, will be a greater burden. for the Turkish treasure in following”.
He also stressed that “the current government’s implementation of an accommodative fiscal policy against the backdrop of its preparation for next year’s decisive elections has led to a deterioration in the value of the Turkish currency against foreign currencies, in particularly with the reduction of interest rates. “
The exchange rate of the Turkish lira against the US dollar touched yesterday, Friday, for the first time in nearly two months, 14.95, before recording a slight increase, to reach the 14.94 exchange rate today.
The Turkish currency has lost around 12% of its value questyear, in addition to the 44% they lost in the last year. That is in largely due to the currency crisis caused by a series of unconventional interest rate cuts.
On Thursday, the data showed that the annual inflation rate in Turkey jumped to 69.97% at the end of April, which exceeds expectations and constitutes the highest level of inflation in the last two decades, driven by the Russian-Ukrainian conflict and by rising commodity prices. prime after the collapse of the Turkish lira at the end of last year, according to reports from Reuters.
The price hike has left families seriously tired just over a year before the presidential and parliamentary elections that could bring the curtain down on President Recep Tayyip Erdogan’s long government as opposition parties try to run those elections with just one. candidate.
And the Turkish Statistical Institute, a government agency, revealed that consumer prices rose 7.25%, on a monthly basis, compared to expectations in a “Reuters” survey, an increase of about 6%.
Consumer price inflation in Turkey is expected to reach 68% year-on-year.
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