The Turkish Lira Fell to a New Low

The price of the US dollar rose against the Turkish lira by about 6% in today’s transactions, to record the Turkish currency’s new low at 17.41 lira to the dollar.

The prices of the Turkish currency are affected as a result of the inflation that Turkey is currently witnessing, which has plunged the value of the lira against the dollar by more than 55% since the beginning of the year.

Turkish President Recep Tayyip Erdogan’s decision to press ahead with a 500 basis point interest rate cut since September, including a big cut on Thursday, has pushed inflation to more than 21 percent.

Economists expect inflation to exceed 30% next year due to higher import prices and an increase in the minimum wage.

Erdogan announced a 50 percent increase in the minimum wage to 4,250 Lira, equivalent to $275 per month, next year.

But this is expected to increase overall consumer price inflation by 3.5 percentage points to 10 percentage points.