Friday, May 28, 2021

Lira’s dip
Turkish currency at record low

While President Erdogan has recently replaced the leadership of the Turkish central bank several times, his country is still in the midst of high inflation. Now the already falling currency lira is losing ground dramatically.

The Turkish currency lira continues to decline. On Friday morning, their exchange rates fell to record lows in trade with the US Dollar and Euro. Lira was paid by 8.5981 in the morning for one dollar. One euro costs up to 10.4745 lira.

Turkey finds itself in a relatively high inflation and spiral of a currency that is devaluing more and more. Inflation in April had risen to over 17 per cent. Recently, the devaluation of the lira again caught momentum after the central bank was sacked. This dashed hopes of a constant fight against inflation.

Just a few days earlier, President Recep Tayyip Erdogan sacked Turkey’s central bank deputy chief Oguzan Ozbas from the post. Semih Tumen, Professor of Economics at Ankara University, will succeed him. The change came two months after Erdogan again replaced the governor of the central bank. The trigger was the line of the changed central banker Nasi Agbal, who took action against the weak lira with high inflation and significant rate hikes. Erdogan is hostile to high interest rates, which he sees as a source of inflation contrary to current economic theory. The current central bank chief Sahap Kavioglu is third in two years.