The Turkish pound is falling again today, bringing its total losses this year to 22%, in the aftermath of Statements by Turkish President Recep Tayyip Erdogan that despite the inflation rally, his government will not raise interest rates.
The pound fell to 16.943 against the US dollar from 16.7650 yesterday, approaching the historic low set on December 20 after the sudden cuts in interest rates by the country’s central bank.
In a speech after the cabinet meeting on Monday, Erdogan stressed that his government would not raise interest rates, but would continue to lower them.
The pound lost 44% last year and is among the worst performing currencies in emerging markets in recent years due to the Turkish president’s steady opposition to interest rate hikes, despite the rally of inflation.
Meanwhile, Turkey’s risk premiums (cds) closed above 730 bp. climbing to the highest levels since the outbreak of the global financial crisis in 2008, Reuters reports, citing data from S&P Global.
Source: Capital
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