Turkey’s lira once again weakened to a record low against the US dollar on Tuesday, standing at 8.489 to the dollar and 9.930 to the euro, coming dangerously close to 10.
The lira has the highest depreciation among developing countries.
The Turkish lira’s decline in value, nearly 30 percent so far this year, has led to higher inflation via imports priced in hard currencies. Prices have also remained elevated due to an increase in borrowing and rising food prices, leading the country’s central bank to raise its year-end inflation forecast last week to 12.1 percent from 8.9 percent.
According to a statement from Turkish President Tayyip Erdoğan on Saturday, Turkey is waging an economic war against “the devil’s triangle of interest and exchange rates and inflation.”
In the past few years Turkey’s institutions, including the independent central bank, have come under Erdoğan’s control. Recent friction with the US over sanctions and with France over a call to boycott French goods have also played a role in the lira’s decline.