The Turkish lira falls to a new record level after falling 37% last year

The Turkish currency, the lira, reached a new record low on Tuesday, dropping to less than 29.7 liras to the dollar. This decline is part of a series of losses that gained momentum towards the end of 2023, with the lira concluding the year down by approximately 37 percent.

At 0754 GMT, the lira experienced a 0.6 percent drop, reaching a historic low of 29.7060 to the dollar.

The significant depreciation of the lira has been observed since President Recep Tayyip Erdogan secured a new presidential term in May. During this period, the government underwent a notable shift in monetary policy, moving away from an unconventional low-interest-rate approach to adopting a policy of monetary tightening.

The lira witnessed a sharp decline last summer when authorities eased their control over the currency. Although the rate of decline slowed in the fall, the currency’s recent drop to a new record low underscores the challenges facing the Turkish economy and the impact of policy shifts on investor confidence.