The Central Bank of Turkey has once again intervened in the foreign exchange market – investors were not impressed

The bank announced that it had sold foreign currency for the third time this month following “unhealthy” price levels – a term used by President Erdogan; however, after a slight recovery, the Turkish currency returned to the level of 14 pounds to the dollar

The Bank of Turkey has intervened again today – for the third time this month – in the foreign exchange market, in an attempt to prevent another fall in the Turkish lira, amid fears over President Recep Tayyip Erdogan’s low interest rate policy.

According to the bank’s announcement, it sold foreign currency following “unhealthy” price levels, a term used by President Erdogan to describe the crisis. .

The pound has lost 38% since the end of September, when the central bank cut interest rates following pressure from Erdogan. The Turkish president believes that high interest rates actually accelerate inflation, and should therefore be avoided. Meanwhile, the country’s inflation rate climbed to 21% in November – a three-year high.

Since the beginning of the year, the central bank has lowered the interest rate by 4 percentage points to 15%. The bank’s policy makers will meet again on December 16, and it is estimated that they will decide to reduce the interest rate further by 14%. This is against the background of Erdogan’s claims against the high interest rates, and against elements outside Turkey, who he says are to blame for the crisis.

By Editor

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