Large foreign banks and institutional investors such as pension funds are withdrawing their money from Turkey.
(Photo: Bloomberg)
Istanbul The Turkish currency is still in free fall. On Wednesday, the lira slipped three percent to a new record low. In return, the rate of the dollar rose to 13.49 lira – higher than ever before. It was the eleventh day in a row with losses. The rate recovered somewhat on Thursday, but the lira has lost more than 60 percent of its value since the beginning of the year.
Analysts attribute the slump to the latest rate cuts by the Turkish central bank and statements by Turkish President Recep Tayyip Erdogan. This is a declared opponent of interest rates and is putting the central bank under pressure; the latter then lowered the key interest rate from 16 to 15 percent last week. For December she announced another rate cut – the inflation rate has risen to almost 20 percent.
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