Ankara, Dec 20 (EFE).- The Turkish lira tumbled to an all-time low Monday amid soaring inflation with a stubborn President Recep Tayyip Erdogan steadfast in his slashing of interest rates going against conventional economic policy.
The Turkish lira plummeted to 18 lira per dollar and 20 lira per euro by Monday afternoon after it reached record lows last week. Despite the crisis, Erdogan has continued to pledge to cut interest rates saying it is necessary under Islamic doctrine.
“Since I have been in office as president, I have always said that I am against interest rates. Because interest rates make the rich richer and the poor poorer,” the president said at a meeting in Ankara with African students in Turkey.
After Turkey’s main business organization TUSIAD called for “rule-based policies beneficial to our country’s economy to pave the way for more predictability, better investment environment and development,” Erdogan said he would not back down from his unconventional strategy because interest rates go against the rules of Islam
Since September, the Turkish Central Bank, under great pressure from the country’s president, has slashed interest rates by 500 basis points, from 19% to 14%, a level much lower than that of year-on-year inflation, which is close to 20%.
The latest cut, from 15 to 14%, was issued Thursday.
Turkish opposition parties have accused the government of sinking the country’s economy and called for immediate general elections.
The Turkish currency has depreciated by over 55% since 1 January 2021, when 1 dollar was equivalent to 7.43 lira and 1 euro to 9.07 lira. EFE