The Turkish pound recorded a new historic dip today, losing more than 4% of its value in one day, against the dollar and the euro.
Around 19.50 yesterday (Cyprus time) the exchange rate was at 13,44 pounds per dollar and 15,15 per euro, a level that had never reached the European currency.
Erdogan on interest rates
The new drop comes just hours before Turkish President Recep Tayyip Erdogan's interview was broadcast on TRT. On Monday, Erdogan reiterated his opposition to any "compromise" on interest rates, despite the currency's sinking.
It lost 13% of its value
The pound lost 13% of its value against the dollar last week in a matter of hours, a loss partly caused by falling interest rates. Disagreeing with classical economic theories, Erdogan believes that high interest rates are conducive to inflation.
Inflation at 20%
As the president wanted, the Central Bank cut interest rates again in November (from 16 to 15%) for the third time in less than two months, while inflation reaches 20%, which is four times higher than the target the government.
Some experts estimate that November inflation, which will be announced on Friday, will be higher than 20%.
Since the beginning of the year the pound has lost over 40% of its value.
SOURCE: in.gr