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Turkish citizens are abandoning their national currency, Lira, in exchange for the US dollar in an unstable economy with rising inflation.
Lira said last Tuesday that President Recep Tayyip Erdogan, who has led the country since 2003, will not be deterred by rising inflation, defending the recent sharp rate cuts by 15% against the dollar on the second worst day. An “independent economic war” that declared it crashed.
Overall, the lira fell 45% this year, primarily in response to a series of interest rate cuts by central bank governor Sahap Kavcioglu.
Due to the currency crisis, the Turkish lira is competing to exchange for the dollar, euro and other more stable currencies.
Foreign currencies held by Turkish bank households from last week to November 19 have risen by nearly $ 1 billion. Data released by the Central Bank of Turkey On thursday.
Approximately 59% of retail bank deposits are currently in foreign currencies, up from nearly 57% last week. Fox Business report, I will quote the official statistics.
However, as of last week, individuals using international cards to pay for certain commodities such as food and clothing in Turkey are struggling to keep up with the ever-changing foreign currency exchanges of payment gateways and card processors. Therefore, I reported that there was a problem with the transaction.
At the same time, this move will force consumers to buy goods using banks that hold Turkish lira, giving more traction to the declining currency.
Prime Minister Erdogan has pressured central banks to lower interest rates, with a strong belief that they will boost domestic exports, investment and employment. But critics fear that this will further erode Lira and cause further inflation, which is now close to 20 percent in the country.
Soaring inflation has already had a dramatic impact on everything from the cost of basic Turkish commodities to rental prices, the latter jumping to new heights. Average prices can be seen in some areas. Shoot 100%— And hundreds of people struggled to pay the rent.
With a population of about 85 million in Turkey, salaries in local currency have been significantly devalued, and many are looking for a second job to highlight themselves and their families.
Many economists called rate cuts reckless and urged the president to reverse the course, but opposition politicians appealed for an early election scheduled for 2023.
Nowadays, hundreds of protesters are taking them to the streets of Istanbul in popular areas such as Taksim on the European side of the city, Kadikoy district on the Asian side of the city, and Sisli. , Bakırköy, Abilal, Baileikdus, blame the government’s economic policies.
The demonstrators sloganed Prime Minister Erdogan’s government to resign and, along with others who reflected his financial plight, put up a sign stating, “We cannot achieve our goals.”
Heavy police were seen throughout the city before police in riot equipment eventually intervened in protests and detained dozens of people. Authorities arrested 55 people during protests, according to the authorities. Local report.
As of Monday morning, Lira was trading at about $ 12.78. This is a recovery from last week’s lows, but it still shows signs of weakness.
Famous economist Mohammed A. El Elian I said on Twitter, “Turkey’s currency isn’t resting much this morning. Weaknesses dominate ahead of this week’s inflation data, which may indicate increasing price pressure, but recent lira’s. The impact of price pass-through due to a sharp drop cannot be fully captured. “
On Monday, Prime Minister Erdogan doubled his support for the government’s economic policy, despite opposition from citizens and economists.
“Prime Minister Tayyip Erdogan talked about low interest rates from the beginning and said,’This interest rate will go down,'” the president reportedly told reporters on his return flight from his visit to Turkmenistan.
“I have never defended an interest rate hike. I haven’t, and will continue to,,” he said. “I will never compromise on this issue … you will see God willing to see how much inflation will go down before the election,” he added. “The interest rate lobby is booming.”
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Katabella Roberts is a reporter currently based in Turkey. She focuses primarily on the United States and covers the news and business of The Epoch Times.
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