The Turkish lira continued to plummet on Wednesday, a day after it fell 15% in the wake of recent rate cuts staunchly defended by Turkey’s President Recep Tayyip Erdogan. The lira has lost 43% of its value since the beginning of the year and declined nearly 24% since last week. The lira was trading at 12.7272 to the dollar at the end of the day Tuesday.
Erdogan defended the rate cuts on Monday, saying that lower rates will help spur economic growth and create jobs. He said that with the cuts, the country is fighting an “economic war of independence”. This reportedly led to the further crash of the Turkish currency.
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It is the third rate cut in three months, and economists have warned that such rate cuts will lead to increasing inflation. The price of basic goods in Turkey has soared and salaries have significantly devalued, as Turkish families struggle to make ends meet.