The Turkish lira drops to the lowest level in history . and Erdogan: “maneuvers are being hatched”

The Turkish lira fell to an all-time low of 11.46 against the dollar, following comments by Turkish President Recep Tayyip Erdogan, who described what is happening as maneuvers on the exchange rate and interest rates.

The lira is seeing declines record with the central bank cutting interest rates at the request of the Turkish president, despite high inflation rates.

Erdogan said on Monday that a strict interest rate policy will not bring down inflation and promised success. in what he called the “war of economic independence”, which pushed the local currency to new historical lows against the dollar.

Speaking at a cabinet meeting, Erdogan said he prefers a competitive exchange rate because it brings more investment and jobs. He also blamed the Turkish lira’s weakness in what he said were exchange rate and interest rate maneuvers, according to “Reuters”.

The lira has lost a third of its value questyear and hit its lowest level ever on Friday at 11.32.

On Thursday, November 18, 2021, the central bank cut the interest rate by 100 basis points to 15%, despite the inflation rate approaching 20%, indicating more monetary easing.

The lira depreciated by 12% in the past week alone, making it the worst-yielding currency in the world. Its 6% drop on Thursday was the biggest since Erdogan, a self-described enemy of interest rates, fired central bank chief Naji Iqbal in March.

The collapse of the lira sparked growing concerns about the outlook for the economy and required an emergency rate hike or other action.

Official data showed today, Monday, that consumer confidence in Turkey plunged 7.3% to 71.1 points in November, the lowest level since the data began to be released in 2004, in consequence of the rapid sale of the Turkish lira at its lowest ever value.

Consumer confidence was dented last year by the fallout from the Covid-19 pandemic, before a recovery that began to fade in October. A confidence level below 100 indicates a pessimistic outlook, while a reading above tale level indicates optimism.

Data from the Turkish Statistical Institute showed in October that consumer confidence fell to 76.8 points from 79.7 points the previous month.

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