Turkish President Recep Tayyip Erdogan has decided to try himself as an economist in order to support the national economy and currency. In Turkey, the central bank is not an independent institution. The country’s president totally controls its activity. However, the current monetary policy has an extremely negative effect on the national currency. Thus, the Turkish lira has been nosediving for a long time reaching fresh lows. The new record lows were logged at the levels of 7.2814 liras for one US dollar and 8.6623 liras for one euro. However, the currency may fall even deeper.
Under the management of Recep Erdogan, the national central bank has lost its reserves, external debt obligations have increased, and the national currency may depreciate by 5% at once.
Investors are preoccupied with the fact that the government has intervened in the monetary policy preventing the lira from rising. As a result, the country may face high inflation, a further decline in investors’ confidence and a new crisis of the balance of payments.
