Photo taken on June 9, 2022 shows Turkish lira banknotes in Istanbul, Turkey. Turkey's lira accelerated its downward spiral on Wednesday after Turkish President Recep Tayyip Erdogan reaffirmed on Monday his pledge to further cut interest rates and ease borrowing.
One dollar was traded at 17.15 Turkish liras at 13:05 local time (10:05 GMT), losing 2.5 percent of its value in a single day, bringing its total losses to almost 100 percent compared with a year ago. (Xinhua/Shadati)
ISTANBUL, June 8 (Xinhua) -- Turkey's lira accelerated its downward spiral on Wednesday after Turkish President Recep Tayyip Erdogan reaffirmed on Monday his pledge to further cut interest rates and ease borrowing.
One dollar was traded at 17.15 Turkish liras at 13:05 local time (10:05 GMT), losing 2.5 percent of its value in a single day, bringing its total losses to almost 100 percent compared with a year ago.
Erdogan has been focusing on a low-interest policy to increase exports and production for a stabilized Turkish currency.
Some commodities, such as diesel fuel, already saw a price hike. An increase of almost 7.5 percent overnight drove the price of diesel fuel to 27.86 liras (about 1.62 U.S. dollars) per liter.
Due to heavy reliance on imported energy and commodities, currency volatility has been a major driver of inflation in Turkey.
"This currency falls will trigger even more inflation, and commodity prices will keep going up," Murat Sagman, an Istanbul-based economist, wrote on Twitter.
Turkey's annual inflation rate recently saw a 24-year high of 73.5 percent.
Hitting another mark, Turkey's five-year credit default swaps also rose to 740 basis points, rivaling levels during the 2008 global financial crisis.
"These risk increases mean extra borrowing costs. Instead of cutting interest, we have to cut down the risks immediately," said Sagman. ■
People are seen at a foreign exchange office in Istanbul, Turkey, on June 9, 2022. Turkey's lira accelerated its downward spiral on Wednesday after Turkish President Recep Tayyip Erdogan reaffirmed on Monday his pledge to further cut interest rates and ease borrowing.
One dollar was traded at 17.15 Turkish liras at 13:05 local time (10:05 GMT), losing 2.5 percent of its value in a single day, bringing its total losses to almost 100 percent compared with a year ago. (Photo by Unal Cam/Xinhua)
People are seen at a foreign exchange office in Istanbul, Turkey, on June 9, 2022. Turkey's lira accelerated its downward spiral on Wednesday after Turkish President Recep Tayyip Erdogan reaffirmed on Monday his pledge to further cut interest rates and ease borrowing.
One dollar was traded at 17.15 Turkish liras at 13:05 local time (10:05 GMT), losing 2.5 percent of its value in a single day, bringing its total losses to almost 100 percent compared with a year ago. (Photo by Unal Cam/Xinhua)
Photo taken on June 9, 2022 shows Turkish lira banknotes in Istanbul, Turkey. Turkey's lira accelerated its downward spiral on Wednesday after Turkish President Recep Tayyip Erdogan reaffirmed on Monday his pledge to further cut interest rates and ease borrowing.
One dollar was traded at 17.15 Turkish liras at 13:05 local time (10:05 GMT), losing 2.5 percent of its value in a single day, bringing its total losses to almost 100 percent compared with a year ago. (Xinhua/Shadati)
People are seen at a foreign exchange office in Istanbul, Turkey, on June 9, 2022. Turkey's lira accelerated its downward spiral on Wednesday after Turkish President Recep Tayyip Erdogan reaffirmed on Monday his pledge to further cut interest rates and ease borrowing.
One dollar was traded at 17.15 Turkish liras at 13:05 local time (10:05 GMT), losing 2.5 percent of its value in a single day, bringing its total losses to almost 100 percent compared with a year ago. (Photo by Unal Cam/Xinhua)
A woman is seen at a foreign exchange office in Istanbul, Turkey, on June 9, 2022. Turkey's lira accelerated its downward spiral on Wednesday after Turkish President Recep Tayyip Erdogan reaffirmed on Monday his pledge to further cut interest rates and ease borrowing.
One dollar was traded at 17.15 Turkish liras at 13:05 local time (10:05 GMT), losing 2.5 percent of its value in a single day, bringing its total losses to almost 100 percent compared with a year ago. (Xinhua/Shadati)
People are seen at a foreign exchange office in Istanbul, Turkey, on June 9, 2022. Turkey's lira accelerated its downward spiral on Wednesday after Turkish President Recep Tayyip Erdogan reaffirmed on Monday his pledge to further cut interest rates and ease borrowing.
One dollar was traded at 17.15 Turkish liras at 13:05 local time (10:05 GMT), losing 2.5 percent of its value in a single day, bringing its total losses to almost 100 percent compared with a year ago. (Photo by Unal Cam/Xinhua)
