Turkey’s Erdogan Met With Central Bank Governor

The Turkish lira’s freefall shattered records Tuesday as Recep Tayyip Erdogan’s intensifying campaign for lower interest rates plunges the country deeper into crisis, triggering an unscheduled meeting between the president and his central bank chief, Reuters reported. The lira, which dropped by more than 15% earlier in the day, was trading 8.2% lower at 12.4062 per dollar as of 5:30 p.m. in Istanbul. The currency’s 11-day losing streak is now the longest in 20 years, and in November alone, it’s lost almost a third of its value. An official with direct knowledge of the matter confirmed the meeting between Erdogan and central bank Governor Sahap Kavcioglu without elaborating on what was discussed. The person spoke on condition of anonymity as the meeting wasn’t officially announced. The presidency declined to comment. The central bank said in a statement that the moves in the currency market were “unrealistic and completely detached from economic fundamentals,” but warned it has no commitment to any exchange rate level. The latest collapse in the currency came after Erdogan defended his demands for lower borrowing costs that have driven up prices and frustrated investors. They complain monetary policy is becoming increasingly irrational and unpredictable in a country where the president’s influence runs deep. While most central banks are talking of tightening policy as the global recovery fuels inflation, Turkey has slashed 4 percentage points off borrowing rates since September. Read more.
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