The Lira dropped by another 2.6% against the dollar on Thursday. This followed a 100 basis point policy rate cut from the nation’s central bank on the same day. Since September, the currency has fallen by 47% against the dollar. Worth 3.29 Lira at the start of September, the dollar’s Lira denominated value now stands above Since September, President Tayyip Erdogan has implemented an unusual and risky policy of heavy interest rate cuts in the face of rising prices across the country. He still prioritizes lending and exports to stimulate economic recovery.
The lira continues to weaken as it loses a third of its value. It’s now down 40% since January and Erdogan’s policies have not yet produced the recovery he promised. He’s prioritizing his country’s exports over importing, but his strategy is running into diminishing returns.
Inflation now sits dangerously high at 21%. Ipek Ozkardeskaya – senior analyst at Swissquote Bank – criticizes Erdogan’s approach. “ Bitcoin’s Solution Bitcoin was created as a remedy for the rampant inflation that nations like Turkey experience under fiat currencies. Its fixed supply of 21 million coins grants it immunity to monetary debasement, earning it the name “digital gold.” Despite being over 25% under its peak in dollar terms, the cryptocurrency just tapped an all-time high against the lira and adoptation is growing fast.
