LONDON (Al-Jazeera) -
Turkey’s currency is slumping to record lows against the U.S. dollar, deepening the poverty felt by households across the country and eroding popular support for Recep Tayyip Erdoğan’s government.
The lira fell 1% to a new low of 9.97 against the greenback on Thursday because of higher-than-expected U.S. inflation data, settling at around 9.93 when U.S. markets opened. The currency has lost a staggering 25% of its value so far this year after a series of deep interest rate cuts by Turkey’s central bank, despite three years of double-digit inflation.
Turkey’s insistence on slashing the benchmark interest rate, even as other central banks around the world use higher borrowing costs to try and put a brake on inflation, reflects Erdoğan’s belief that high interest rates, which he has termed “the mother and father of all evil”, fuel higher inflation.