The Turkish pound is falling 5% close to 12 against the dollar, reaching a new low, the 11th in a number of days, after the statements of President Erdogan, who defended the recent interest rate cuts, and pledged to win the ” economic war of independence ”, despite widespread criticism.
The pound fell to 11.9990 against the US currency and was trading at 11.8200.
It has lost 38% of its value since the beginning of the year, while since last week it has fallen by 17%.
Erdogan has pressured the central bank to turn to an aggressive cycle of tightening aimed at boosting exports, investment and jobs, despite inflation soaring near 20% and currency devaluation accelerating, significantly eroding citizens’ incomes.
Former central bank deputy governor Semih Tumen, who was ousted by Erdogan last month, has called for an immediate return to policies that protect the value of the pound.
“This absurd experiment, which has no chance of success, must be abandoned immediately and we must return to quality policies that protect the value of the Turkish pound and the well-being of the Turkish people,” he said on twitter.
The pound is by far the worst performer in emerging markets this year, largely due to reckless policies and premature monetary easing.
Against the euro, the pound weakened to a new low, at 13.4035.
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