The Turkish currency broke through a key threshold Monday against the U.S. dollar amid the soaring inflation rate. At 2:10 p.m. (1110 GMT), one dollar was traded at 15.03 Turkish liras, exceeding the resistance level of 15.00. The currency has lost almost 60 percent of value against the greenback since 2021.
According to Yalcin Karatepe, a professor of finance at Ankara University, Turkey’s central bank intervened to keep the lira below the threshold of 15.00 in the morning but failed. One dollar was fluctuating in the narrow band of 14.50-15.00 liras for the last two months.
The renewed depreciation of the Turkish currency came after the country’s inflation rose at a monthly rate of 7.25 percent in April and 69.97 percent from a year earlier, the highest in the last two decades, driven mainly by growing transportation and food prices, the Turkish statistical institute revealed. The Turkish economy has long been suffering from a series of turmoil, including the conflict between Russia and Ukraine, which pushed the energy prices up.
In February, the Turkish government announced new economic measures to ease the economic burden on Turkish citizens against the skyrocketing cost of living, including reducing the value-added tax on basic food products and giving credit support to businesses and exporters. It also raised the monthly minimum wage by 50 percent to 4,250 liras, but the measures fell short to alleviate the economic suffering.