Ankara-Sana
The Turkish lira fell to a new record low today, down five percent, due to the sharp cuts in interest rates imposed by the Central Bank under pressure from the President of the Turkish regime, Recep Tayyip Erdogan.
Reuters reported that the lira fell to 11.9990 against the dollar, after it had earlier recorded 11.8200 against the dollar.
The Turkish currency has lost 38 percent of its value this year, including a 17 percent decline since the beginning of last week.
The central bank cut the interest rate last Thursday by 100 basis points to 15 percent, under pressure from Erdogan, which is well below the inflation rate of about 20 percent.
Turkey's central bank has cut interest rates by a total of 400 points since September in what analysts described as a serious policy mistake in light of the profound negative results and given that all other central banks have begun or are preparing to tighten fiscal policy.
The continued depreciation of the Turkish currency is mainly due to Erdogan's repeated interventions in monetary policy and the rapid changes he has imposed in the leadership of the Central Bank.
