Turkey’s Lira Falls Further as Erdoğan Invokes Islamic Usury Doctrine

Turkey’s lira fell to an all-time low on Monday, after President Recep Tayyip Erdoğan invoked the Islamic doctrine against charging high interest, or usury. The comment came a day after Erdoğan defended his policy of keeping interest rates low, telling a Turkey-Africa summit in Istanbul that “sooner or later, just as we lowered inflation to 4% when I came to power … we will reduce it again.” He added: “But I won’t let my citizens, my people, be crushed by interest rates.”

Erdoğan believes that lower interest rates will stimulate growth and production and boost exports. The country’s central bank has cut the main interest rate by 500 points since September. The lira has fallen 35% in the last month. The currency was at 17.44 lira to the dollar as of Monday morning.

The price of basic goods in Turkey has soared and salaries have significantly devalued, as Turkish families struggle to make ends meet.