The Turkish lira falls to a record low and Erdogan promises to "rescue" investors

The Turkish lira falls to a record low and Erdogan promises to "rescue" investors



Twilight News

5 hours ago

(Reuters) - Turkish President Recep Tayyip Erdogan stuck to his position on Monday despite the devaluation of the lira, vowing to cut interest rates in order to "save" investors, in comments likely to increase market concerns over Turkish monetary policy and inflation.

The lira has lost 6.5 percent of its value against the dollar this year on fears that Erdogan's drive to cut interest rates would make for a more accommodating policy even as inflation remains at a level not far from the highest in 14 years.

Erdogan, who describes himself as an "enemy" of interest rates, wants to cut borrowing costs to boost investment and stimulate the economy. Investors worried about inflation and a large current account deficit say the central bank needs to tighten monetary policy to support the lira.

"How will there be investments if you do not cut interest rates?" Erdogan said in a speech in Ankara announcing a $ 34 billion investment stimulus package to help Turkish companies. We call this an investment-based incentive system. "

"We must save the investor from high interest rates so that he can inject investments. When there are investments, there will be employment, production and export. "

The lira hit all-time lows against the US dollar, recording 4.0755 lira to the dollar before recovering at 1300 GMT to trade at $ 4.0510. It also touched a record low against the EUR at 5.001 lira per euro.

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