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Turkish lira falls to record low

2020-10-26T15:14:46.767Z

The Turkish national currency continues to collapse. For the first time, more than eight lira are due for one dollar. President Erdoğan called for a boycott of French goods - and could have fueled the decline.



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Turkish lira notes: lost 35 percent of their value since the beginning of the year

Photo: 

Murad Sezer / REUTERS

It was apparently a request from Turkish President Recep Tayyip Erdoğan that sealed the recent crash: "Don't pay attention to French brands, don't buy them."

Shortly thereafter, the Turkish lira fell below an important level again.

For the first time, more than eight lira have to be paid for one dollar - more than ever before.

Foreign goods have not only become more and more expensive for people in Turkey since this boycott threat.

The country's currency has been losing value for nine weeks now, it is the longest-lasting slide since 1999. Throughout 2020, the lira lost around 35 percent of its value in trading with the dollar.

Twelve percent inflation

Recently, Turkey's relationship with important trading partners in the European Union had come to a head after Erdoğan attacked his French counterpart Emmanuel Macron.

Erdoğan accused Macron of Islamophobia in the dispute over the Mohammed cartoons, described the French president as a case of illness - and called for a boycott of French goods.

Several Arab countries had already launched a boycott against France on Sunday because of the cartoons.

Traders in Jordan, Kuwait and Qatar took French goods from their stores.

Last week the Turkish central bank did not raise the key rate as generally expected.

Despite a high inflation rate of almost twelve percent, it left the key interest rate unchanged at 10.25 percent.

In the past, Erdoğan had spoken out against rate hikes several times, thereby calling into question the independence of the central bank.

Business Association: Resist Turkish Blackmail

In France, meanwhile, there is outrage over the threats from Turkey.

It is out of the question to give in to the blackmail, said Geoffroy Roux de Bézieux, head of the largest business association Medef, the television channel BFMTV.

"There are times when we have to put principles before the opportunity to grow our business."

At the same time, he asked affected companies to "unfortunately endure this boycott for the time being."

Paris had already called its ambassador from Ankara back to protest against the Turkish threats.

After the brutal murder of a teacher in France, Macron defended freedom of expression and sided with those who want to show or publish satire.

France will not "do without caricatures and drawings, even if others withdraw," he said at a memorial service in honor of the late Samuel Paty.

He had shown Mohammed cartoons in class and was killed in the street and then beheaded.

Icon: The mirror

apr / dpa-AFX

Source: spiegel

All business articles on 2020-10-26

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