New broadside from Erdogan: Turkish lira falls to record low - well-known politician with drastic demand 

The Turkish lira collapsed again on Tuesday.

The trigger was statements by President Recep Tayyip Erdogan.

Ankara - The Turkish lira fell to record lows against the dollar and euro on Tuesday.

Against the dollar, the daily losses were at times ten percent.

In return, the dollar rose above 12 lira for the first time.

The euro rate rose to 14.06 lira.

Erdogan demanded a "competitive" lira on Tuesday.

An even weaker exchange rate should encourage investment and jobs.

The currency had already come under pressure * in the past few weeks.

In addition, a serious diplomatic crisis had frightened investors.

In this month alone, the lira has lost around a quarter of its value against the dollar and the euro.

Turkish Lira: The slide should further fuel inflation

This should further fuel inflation as imported goods become more expensive.

The central bank had recently lowered the key interest rate after Erdogan's pressure and thus sent the lira to lows.

While the inflation rate is almost 20 percent, the key interest rate has been reduced to 15 percent.

Another rate cut is likely to follow in December.

Erdogan takes the view, contrary to the current doctrine, that high interest rates promote inflation.

Turkish lira: pressure on central bank is increasing

The pressure on the Turkish monetary authorities is likely to continue.

Devlet Bahceli, head of the nationalist party MHP, called for a discussion on the end of the independence of the central bank.

The MHP is part of Erdogan's government.

"Independent institutions cannot stand above the will of the people," said Bahceli.

"Turkey should be free from the interest burden." He also demanded that Turkey oppose the International Monetary Fund and the "interest lobby".

The statements are likely to further weaken confidence in the lira and the Turkish economy.

* Merkur.de is part of IPPEN.MEDIA.