Turkey lira slumps to new record lows | The Daily Star
12:00 AM, July 13, 2018 / LAST MODIFIED: 12:00 AM, July 13, 2018

Turkey lira slumps to new record lows

Turkey's embattled lira slumped almost five percent to new record lows in value against the US dollar on Wednesday after concern over President Recep Tayyip Erdogan's new cabinet and his latest comments on interest rates.

The lira was trading at 4.93 to the dollar, a loss of 4.7 percent on the day and appeared at risk of dropping to five liras to the dollar for the first time in history. The fall means it has surpassed the record lows seen last in May ahead of an emergency rate hike by the central bank.

Erdogan on Monday named his son-in-law Berat Albayrak, the husband of his elder daughter Esra, as treasury and finance minister in a cabinet reshuffle for his new term.

Albayrak's surprise switch from the energy ministry spooked financial markets, who were also unhappy to see there was no room for outgoing deputy prime minister Mehmet Simsek, the government's previous pointman on the economy.

Markets are also concerned that Erdogan underestimates the dangers posed by inflation, which surged to over 15 percent in June for the first time in almost one-and-a-half decades.

The president was quoted by Turkish newspapers including the Hurriyet newspaper on Wednesday as saying "we will see a decrease in interest rates," and warning high interest rates could hurt employment.

But economists are urging tighter monetary policy to fight inflation.

Stay updated on the go with The Daily Star Android & iOS News App. Click here to download it for your device.

Type START <space> BR and send SMS it to 22222

Type START <space> BR and send SMS it to 2222

Type START <space> BR and send SMS it to 2225

Leave your comments

Top News

Top News