ERBIL, Kurdistan Region - Turkey’s currency further devalued on Friday to 10 liras against one US dollar, months after the central bank began cutting interest rates, Reuters has reported.
Ankara’s commitment to cut interest rates is reflective of President Recep Tayyip Erdogan’s belief that inflation could increase otherwise.
Despite the continuous devaluation of its currency, Ankara has continued intervening in the affairs of regional countries. Its parliament recently extended its troop deployment in Syria and Iraq for two years, and in Azerbaijan to over one year.
The lira has performed poorly in the market in 2021, losing two-thirds of its value in five years.
The Financial Action Task Force (FATF), a global finance watchdog, added Turkey to its grey list for the country’s failure to combat money laundering and terrorist financing. This may have contributed to the further devaluation of the lira.
Erdogan has changed a number of presidents of the central bank recently.
Sahap Kavcioglu, who was appointed by Erdogan as the new head of the bank in March, said late last month that “Turkey’s main problem is the current account deficit.”
“When we solve this problem and there’s a current account balance, the exchange rate will return to normal,” he added.
Ankara’s commitment to cut interest rates is reflective of President Recep Tayyip Erdogan’s belief that inflation could increase otherwise.
Despite the continuous devaluation of its currency, Ankara has continued intervening in the affairs of regional countries. Its parliament recently extended its troop deployment in Syria and Iraq for two years, and in Azerbaijan to over one year.
The lira has performed poorly in the market in 2021, losing two-thirds of its value in five years.
The Financial Action Task Force (FATF), a global finance watchdog, added Turkey to its grey list for the country’s failure to combat money laundering and terrorist financing. This may have contributed to the further devaluation of the lira.
Erdogan has changed a number of presidents of the central bank recently.
Sahap Kavcioglu, who was appointed by Erdogan as the new head of the bank in March, said late last month that “Turkey’s main problem is the current account deficit.”
“When we solve this problem and there’s a current account balance, the exchange rate will return to normal,” he added.
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