The Turkish pound is falling. On Friday, one dollar is equivalent to 16.50 Turkish pounds
At a high of 23 years, at 73.50%, Official inflation in Turkey rose in May, according to data released by the Turkish Statistical Service (TURKSTAT) on Friday.
This is the highest annual inflation rate since February 2002, according to official data.
Jump 107.62% in the general index of consumer prices is noted in the cost of transport, reflecting the energy crisis, while food and non-alcoholic prices are 91.63%. The cost of household equipment increased by 76.83%, alcohol and tobacco also increased by 66.62%.
At the same time, the Turkish pound is falling. On Friday, one dollar is equivalent to 16.50 Turkish pounds, while the euro is now equivalent to 75 17.75.
73.5% is the highest level since October 1998, Turkey was plagued by a period marked by unstable coalition governments and economic turmoil, the Financial Times points out.
Tayyip Erdogan, A strong opponent of high interest rates, it has instructed Turkey’s central bank to repeatedly cut borrowing costs in recent months despite rising inflation.
The Turkish president said he was launching a new economic model that would use a cheap pound and an export “boom” to reduce inflation by eliminating the country’s long-standing trade deficit. Even before the war in Ukraine, critics had described the plan as an economic one High risk “experiment” which was in danger of causing the value of the Turkish pound to collapse and launch an uncontrollable inflation.
Russian President Vladimir Putin’s invasion of Ukraine has exacerbated the challenges, as rising global energy prices have pushed up the cost of Turkey’s already large energy imports and further fueled inflation.
While Turkey has enjoyed strong growth thanks to its extremely loose monetary policy, the surge in the cost of living has contributed to the erosion of popular support for Erdogan in the run-up to the June 2023 elections.
Erdogan said last month that “those who link interest rates to inflation are either illiterate or traitors “.
