The Turkish lira plunged to a new record, its lowest ever, at 12.4 lira against the US dollar, with Turkish President Recep Tayyip Erdogan’s defense of lowering interest rates.
Erdogan defended his quest to lower interest rates The interest to boost economic growth and job creation, which pushed the lira to a new record low against the dollar.
Turkey has abandoned old policies based on high borrowing costs and a strong currency in the name of slowing inflation, Erdogan said. Instead, it switched to a new system that prioritizes increasing investments and exports and creating strong job opportunities.
He added after a cabinet meeting in the capital, Ankara, “We had two options, either we abandon investments, industrialization, growth and jobs, or we face A historic challenge to meet our priorities.”
This comes while most central banks are talking about tightening monetary policy, as the global recovery is fueling higher prices, but Turkey’s decision came in the opposite after it cut interest rates 4 percentage points since September, which confused markets and frustrated investors who complain that its monetary policy is sound
Erdogan’s pledge to double down on his recent drive to cut the cost of financing sent the lira down after the Turkish markets closed, dropping 2.1% to 11.4767 against the dollar and trading 0.9% lower. At 11.3804 per dollar.
During his speech, Erdogan said, there is a “game” being played against Turkey by those who use interest rates and exchange rate Currency and inflation.
He added: “We are happy to see that the central bank interest rate is being kept low.”
He pledged that Turkey would take tough measures against “unfair and unfair increases.” explainable in prices” by those who use the weak lira as an excuse.
Erdogan asserted, “We know very well what we are doing with the current policy, why we are doing it, what kind of risks it entails and what we will achieve in the end.”