Monday dip for the Turkish pound

The Turkish pound, which lost another 6% of its value against the dollar, plunged again today after President Tayyip Erdogan said he would not raise interest rates to stabilize the currency.

Erdogan is pushing the Central Bank every month to cut interest rates despite inflation, which, according to official figures, has exceeded 21% year-on-year and is likely to reach 30% in the coming months, according to financial analysts.

In a statement broadcast late last night but videotaped on Saturday, the Turkish president invoked the principles of Islam, which bans interest rate hikes, to justify his policies.

"As a Muslim, I will do whatever our religion commands me to do. "God willing, inflation will be reduced when possible."

Erdogan made the remarks in response to a call by the Turkish business community late last week calling for action to address the crisis.

"The political choices being implemented have not only created new difficulties for the business world, but also for our fellow citizens," said Tusia, a Turkish employers' organization that represents about 85% of Turkey's businessmen and major exporters.

"Therefore, it is urgent to assess the damage done to the economy and return to the economic principles that govern the market economy," Tusia said in a statement issued by its Washington bureau.

Responding to this appeal, Erdogan videotaped the statements that were broadcast last night: "They are complaining about the reduction of interest rates. "But do not expect anything else from me."

Since January, the Turkish pound has lost 57% of its value against the dollar and for Turks this collapse translates into an unmanageable price spike, while the country is highly dependent on imports, mainly in the raw materials sector. materials and energy.

Commodity prices such as sunflower oil have skyrocketed by 50% in one year.