Turkish Lira Continues Record Decline: What International Media Are Reporting

On Tuesday, the Turkish lira depreciated by another 4% against the dollar as Turkey prepares for inflation to reach a 19-year peak, despite President Recep Tayyip Erdoğan stating that the worst of the economic shocks is behind them, reports Reuters.

The Turkish currency has reached 13.5 to the dollar. Economists have predicted that the weakening of the lira and a series of administrative price hikes, including for utilities and wages, will continue to contribute to inflation this year.

The year 2021 was the worst for the lira since Erdoğan came to power, with the currency weakening by 44%, marking the worst performance among emerging markets. Two weeks ago, it hit a record low of 18.4, but later recovered when the government introduced a deposit protection scheme.

Erdoğan stated that he will not leave his people at the mercy of “extreme” price increases and unstable currency exchange rates. Fluctuations in exchange rates are “thorns, stones thrown in front of us,” he added.

Erdoğan's “new economic program,” which calls for sharply lowering interest rates and focusing on exports and credit despite soaring prices, has led to Turkey's second currency crisis in four years. In just the past few months, the lira has lost 50% of its value, resulting in rising prices for imported goods and other commodities.