The Turkish lira fell to its lowest level against the dollar, with continued uncertainty about the results of the presidential and legislative elections in mid-May, which could lead to the first political change in 20 years.
The currency fell to 19.5996 pounds per dollar, which is unprecedented since the adoption of the new pound in January 2005.
Since the rapid decline in the value of the Turkish currency at the end of 2021, the government has taken measures to support it following its decline due to inflation and capital outflows.
“It failed,” said Mike Harris of the consulting firm, Krebstone Strategic Macro. Although inflation has been decelerating steadily for the last 5 months, it was still at 50.51% in one year in March.
Contrary to traditional economic theories, Turkish President Recep Tayyip Erdogan believes that high interest rates promote inflation.
However, this monetary policy contributed to fueling the decline of the Turkish lira and raising the cost of living.
Erdogan, who says he favors growth and employment over price stability, said at the end of January that “inflation will slow down rapidly” in his country to “30 percent in the coming months.”
Kemal Kilicdaroglu, Erdogan’s main opponent in the presidential elections, promised that if he wins, he will work to restore the independence of the central bank.
The outgoing president’s economic toll has weakened his bid for re-election, with recent opinion polls giving his main opponent a slight lead.
This article was originally published by RT.
