Turkey

Turkish President Recep Tayyip Erdogan is set to meet Thursday with the leader of El Salvador, the first country to make bitcoin legal tender, while the Turkish central bank kept interest rates on hold in a move that will likely do little to arrest the country’s currency crisis, the Wall Street Journal reported. With El Salvador planning to launch a $1 billion bitcoin-backed bond, Turks and foreign investors are watching closely to see if the meeting between Mr.

The United Arab Emirates and Turkey agreed to a currency swap equivalent to nearly $5 billion that reinforces an economic partnership between two Middle Eastern rivals and provides Ankara with a badly needed infusion of foreign funds, the Wall Street Journal reported. The deal, announced Wednesday, deepens the detente between Turkey and the U.A.E., powers that until recently were on opposite sides of a Middle Eastern cold war and remain at odds over conflicts in the region.

The Turkish lira has become so volatile that Turks have ditched the local currency for assets with an even riskier reputation: cryptocurrencies, the Wall Street Journal reported. While the lira unraveled against the dollar in the last quarter of 2021, cryptocurrency trading volumes using the lira leapt to an average $1.8 billion a day across three exchanges, according to blockchain analytics firm Chainalysis.

Turkey’s inflation climbed to a nearly two-decade high in December on the back of a weakening lira that is driving up the cost of food and other basic goods and destabilizing the wider economy, the Wall Street Journal reported. Annual inflation rose to 36.08% last month, up from 21.3% in November, the Turkish Statistical Institute said Monday—the highest inflation rate since 2002, according to economists. The rampant inflation raises new concerns that it could overwhelm a government rescue plan unveiled last month to stabilize the battered local currency.

The cost of borrowing money in Turkey is surging, a sign that President Recep Tayyip Erdogan’s policy of driving down interest rates is starting to backfire, Bloomberg News reported. Since the central bank began slashing rates in September, the yield on 10-year government bonds has climbed more than 7 percentage points, touching an all-time high of 24.9% on Wednesday. It stands at more than 10 percentage points above the bank’s benchmark repo, the biggest premium on record.

Turkey’s currency tumbled against the dollar Wednesday, a setback to the government’s experimental plan to stabilize the currency, the Wall Street Journal reported. The lira fell more than 6% against the greenback, undoing part of the currency’s significant comeback since last week, when Turkey’s government said it would guarantee returns on certain lira bank deposit accounts at a rate similar to those on foreign currency. The plan was aimed at stopping a brutal currency meltdown.

President Recep Tayyip Erdogan’s government announced extraordinary measures to bolster the Turkish lira, including the introduction of a new program that will protect savings from fluctuations in the local currency, Bloomberg News reported. The government will make up for losses incurred by holders of lira deposits should the lira’s declines against hard currencies exceed interest rates promised by banks, Erdogan said after chairing a cabinet meeting in Ankara.

President Recep Tayyip Erdogan pledged to continue interest rate cuts that have made the Turkish lira the world’s worst performing currency over the past three months, referring to Islamic proscriptions on usury as a basis for his new policy push, Bloomberg News reported. “What is it? We are lowering interest rates. Don’t expect anything else from me,” Erdogan said Sunday in televised comments from Istanbul. “As a Muslim, I’ll continue to do what is required by nas,” Erdogan said, using an Arabic word used in Turkish to refer to Islamic teachings.

Turkey’s minimum wage will rise 50% in 2022 to help offset living costs that have surged as the central bank unleashed a series of lira-weakening interest-rate cuts to support President Recep Tayyip Erdogan’s push to rewire the economy, Bloomberg News reported. The monthly net minimum salary will be 4,250 liras ($275), Erdogan said during a televised press conference. In 2021, it stood at 2,826 liras, a figure that converted to $380 at the start of the year but has fallen to $186 with the lira’s 51% depreciation.