Inflation in Turkey does not stop
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The Turkish lira lost 44% of its value against the dollar last year as a result of central bank action.
Over the year, inflation in Turkey rose to 36% amid demands by the country’s president to comply with a policy of low discount rates, informs Reuters.
This inflation rate of 36.08% is the highest in the country in 19 years. It exceeded average forecasts by 30.6% as a result of faster growth in transport and food prices.
In December alone, inflation in Turkey settled at a double-digit level of 13.58%.
The Turkish lira lost 44% of its value against the dollar last year as a result of central bank action. President Recep Tayyip Erdogan is pressing the regulator not to raise the interest rate to curb inflation.
Thus, Erdogan plans to rebuild the economy by increasing lending and exports. To comply with this course, he resorted to both the change of the head of the central bank and the minister of finance.
In this regard, the rating agency S&P Global Ratings has downgraded the forecast for the country’s sovereign credit rating to negative.
Economists and the opposition criticize Erdogan’s policies, because the abandonment of a tighter monetary policy leads to an acceleration in price growth. A further rise in inflation provoked a wave of protests in the major cities of Turkey in November and December.
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