The Turkish lira fell to its lowest level against the US dollar today due to the decision of the Central Bank of Turkey to reduce the reference interest rate again.

This morning, while the central bank’s decision was expected, 15.28 lira could be obtained for one dollar, at least until then, and later the lira would weaken further.

Later today, 15.6 lira could be obtained for the dollar, which weakened it by five percent compared to yesterday.

The board of the central bank for monetary policy announced today that it is reducing the reference interest rate from 15 to 14 percent, although inflation is 21 percent, according to official data.

The decision is in line with the policy of Turkish President Recep Tayyip Erdogan, who claims, contrary to traditional economic theory, that high interest rates cause inflation.

Erdogan insists on low borrowing costs to boost economic growth, exports and investment, ahead of elections in a year and a half.

The central bank has reduced the reference interest rate by five percent since September, which is contrary to the conventional economic policy of raising interest rates in order to reduce high inflation.

The Turkish lira has lost about 50 percent of its value since the beginning of the year.

The weakening lira and rising inflation in Turkey have seriously undermined the purchasing power of citizens, many of whom are barely making ends meet.

By Editor

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