FX.co ★ Turkish lira slides to record low

Turkish President Recep Tayyip Erdogan is the very embodiment of supreme confidence in his own rightness. Despite the record collapse of the national currency, the head of the state is confident in his decisions, as well as announces a new interest rate reduction.

Erdogan ended his recent speech to the ruling Justice and Development Party in Parliament with the words: “I have never advocated and won’t be advocating for interest rate increases”. The president is satisfied with the monetary policy, which he implements himself or, in the last resort, involves some of his relatives. Independent financial regulators are not common to Turkey. According to Erdogan, high interest rates are the main problem and the authorities must solve it. The truth is that the government's actions are the key reason for high inflation, inflicting suffering on the population. The president has consistently refused to raise the rate as long as he takes his post.

Erdogan holds the unusual belief that high interest rates complicate lending to the economy, significantly hampering economic growth and causing inflation. Independent experts have long noted that the Turkish central bank has practically lost its independence, and the lira has no chance of recovery. The currency will further decline and set new all-time lows. This month, the Turkish lira has lost 14% and has plunged a third of its value for the year.