LAST UPDATE 14:48
The Turkish pound is heading for its worst year since President Tayyip Erdogan came to power two decades ago, despite his call today for Turks to trust his unorthodox policies to cut interest rates in the face of rising inflation.
The Turkish lira weakened for a fifth straight day on Friday. Historical gains in December 21-24 were undermined as investors continued to worry about the country’s unorthodox monetary policy and rising inflation, according to Reuters.
The pound was at 13.3 against the dollar with weak trades at 10:06 Greek time, down 20% from the end of last week.
Turkish incomes have eroded in recent months since the pound slipped, although it recovered from $ 18.4 to $ 10.25 last week following the introduction of a government program to protect local pound deposits from devaluation losses. hard currencies.
The situation this week shows that despite the efforts to change the momentum, it seems that investors are not convinced by the opportunistic tactics of the Turkish president, as the pound has lost almost half of its historic gains in the week before Christmas.
Finance Minister Nurettin Nebati said this week that Turkish dollar savings had since declined, but official figures on Thursday showed that local hard currency savings had hit a record $ 238.97 billion last week. At the same time continues to raises concerns among market analysts and economists with its bizarre statements.
At the same time, the net foreign exchange reserves of the central bank fell to a low of almost two decades.
The monetary crisis was triggered by the sharp cuts in central bank interest rates, which stood at 500 basis points since September, under pressure from President Tayyip Erdogan as part of a bid to boost credit and exports.
Economists have stressed that the easing is reckless, given that inflation has risen by more than 21% and is expected to jump over 30% this month and in the coming months due to the devaluation of the pound.
Today, Erdogan called on Turks to maintain Turkish lira savings and transfer their gold reserves to banks, saying market fluctuations are largely under control. Following the statements, the pound expanded its losses, falling to 1.4% to 13.414 against the dollar, recording a fall of 20% since the end of last week.
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