The Turkish pound continues to decline today, widening the losses of the previous days in a new indication that the emergency measures announced last week to support the currency may not be enough.
The Turkish currency is losing more than 2% today at 12.1635 per dollar with the total losses since the beginning of the week now exceeding 12%. This follows last week’s upward reaction after falling below the level of 18 pounds per dollar. The uncontrolled fall of the currency forced the government to announce a scheme in which the Ministry of Finance will cover the losses in deposits in pounds.
Despite commitments from the government and the country’s central bank, concerns about the Erdogan government’s economic model remain at the forefront. The Turkish president insists on lower interest rates despite the explosion of inflation in recent months and while there is no sign of easing inflationary pressures in the near future. Analysts expect annual inflation to exceed 30%, according to a Reuters poll. In the shadow of Erdogan orthodox policies, the pound has lost 38% of its value this year.
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