Alwaght-Turkey's lira plunged over 15% on Tuesday after President Tayyip Erdogan defended recent rate cuts and vowed to win his "economic war of independence," despite widespread criticism and pleas to reverse course.
The lira tumbled to as low as 13.45 to the dollar, plumbing record troughs for an 11th straight session. It has lost 45% of its value this year, including a near 26% decline since the beginning of last week, Reuters reported.
Erdogan has applied pressure on the central bank to pivot to an aggressive easing cycle that aims, he says, to boost exports, investment and jobs — even as inflation soars to near 20% and the currency depreciation accelerates, eating deeply into Turks' earnings.
Many economists called the rate cuts reckless and urged a reversal, while opposition politicians appealed for early elections. Turks told Reuters the dizzying currency collapse was upending their household budgets and plans for the future.
Former central bank deputy governor Semih Tumen, who was dismissed last month in the latest of Erdogan's rapid leadership overhaul, called for an immediate return to policies which protect the lira's value.
"This irrational experiment which has no chance of success must be abandoned immediately and we must return to quality policies which protect the Turkish lira's value and the prosperity of the Turkish people," he said on Twitter.
Tuesday's slide was the lira's worst since the height of a currency crisis in 2018 that led to a sharp recession and following years of sub-par economic growth and double-digit inflation.
Though the lira pared some losses by 1339 GMT, when it was worth 12.7 to the dollar, the last 11 days of losses has been its worst run since 1999.
The central bank has slashed rates by a total of 400 points since September, leaving real yields deeply negative as virtually all other central banks have begun tightening, or are preparing to do so.
The lira has been by far the worst performer globally this year due mostly to what some analysts have called a premature economic "experiment" by the president who has ruled Turkey for nearly two decades.
