The Turkish lira has become the topic of the week, with dropping massively over the weekend and on Monday amid a developing financial crisis in Turkey, record-high inflation, and a political disagreement with the United States which led to tariffs being introduced on Turkish goods. However, yesterday the lira began to recover some of its lost ground, which continues into today as well.
The Turkish central bank is currently taking steps to mitigate the lira’s massive drop. Although the Turkish lira was able to appreciate by 5% today, that still leaves it very far from the levels from the beginning of the year. President Erdogan has remained firm in his belief that interest rates must be kept low, so it is not clear how the central bank would proceed. Under normal circumstances, interest rates would have been hiked at the first sign of unchecked inflation, but it seems that the President does not allow it.
As per the United States, Turkey increased the amount of tariffs on US imports twice. These are imposed on goods such as tobacco, alcohol, and automobiles.
