Middle East

Turkish central bank cuts rates as Turkish lira plunges

21:55, 21 October 2021
Turkish central bank cuts rates as Turkish lira plunges Photo: twitter.com/tcbestepe_ru

The central bank of Turkey lowered interest rates making the Turkish lira hit a new all-time low. 

Governor Sahap Kavcioglu lowered the interest rate by two percent, bringing it down to 16 percent. 

Many economists awaited such a move but none of them expected it to be so large.

The President of Turkey Recep Tayyip Erdogan himself for a long time blamed high interest rates for the inflation while economists say that his perception of the economy is incorrect. 

Last week the President fired three central bank policymakers.

The prices in Turkey have been rising for quite a while now as the inflation rate has reached almost 20%.

The leader of the opposition Republican People’s Party Kemal Kilicdaroglu has said that the President’s actions are signs of “betrayal of the nation or a health problem” which are “leading the country towards hunger.”

While the Former Prime Minister of Turkey Ahmet Davutoglu said “instead of fighting inflation, the central bank seems to be under the control of politics.”

This year alone the Turkish lira lost as much as 20 percent of its value against the dollar.

 Currently one USD is traded for 9.50 Turkish liras.

The prices for many vegetables which are grown in Turkey itself and essential for basic Turkish meals have more than doubled during this past year. 

The minimum wage of 3,577 liras is barely enough to cover even the basic expenses.