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Neo-nationalist party suggests banning US dollar in Turkey to solve lira crisis

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The neo-nationalist Homeland Party (VP) has suggested banning use of the dollar in Turkey to solve the country’s currency crisis, quickly becoming a controversial topic on social media, local news outlets reported on Wednesday.

“We’ve always said it, and we’ll say it again: Ban the dollar!” the party, founded and chaired by Doğu Perinçek, the long-time leader of Turkey’s ultra-secularists, said in a tweet on Tuesday, along with an old video showing party members campaigning for the argument.

“[Use] Turkish lira in Turkey! End the free-market regime! Control the economy!” the party said, arguing that the Justice and Development Party (AKP) government should implement foreign exchange controls.

The VP claimed that government-imposed limitations on the purchase and/or sale of foreign currencies, the US dollar in particular, would fix the country’s economic problems stemming from the gradual depreciation of the Turkish lira.

While the argument found some support from social media users, others made sarcastic comments, claiming that the party had an archaic and unrealistic approach to the economy.

The Turkish currency has shed 45 percent of its value this year, becoming the world’s worst-performing currency in 2021.

It nosedived more than 15 percent on Tuesday, tumbling as far as 13.45 to the dollar and plumbing record lows for an 11th straight session, before trimming some of those losses to close 10.2 percent lower at 12.7015.

The collapse was triggered by President Recep Tayyip Erdoğan, who on Monday defended the central bank’s recent rate cuts and vowed to win his “economic war of independence,” despite widespread criticism and pleas to reverse course.

The bank cut its policy rate last Thursday by 100 basis points to 15 percent, well below inflation of nearly 20 percent, under pressure from Erdoğan.

It has now slashed rates by 400 basis points since September in what many analysts say is a risky policy mistake.

Erdoğan is widely criticized for subscribing to the unorthodox belief that high interest rates cause high inflation instead of slowing it down.

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