After the lira crashed, President Erdogan announced that in order to protect savers, the difference between lira investments and comparable dollar investments will be paid from the treasury in the future. With a series of measures he wants to prevent another one from the economy. The lira then recovered briefly.
Inflation had risen to more than 21 percent in November. Experts forecast that inflation should reach 30 percent in the coming year. This is mainly due to the fall of the lira, which has lost more than half of its value against the dollar this year. This makes imports more expensive because they usually have to be paid for in foreign currencies such as dollars or euros.
The experts see one reason for the currency crisis and the strong inflation in the more than unusual monetary policy of the central bank. This has lowered its key interest rate from 19 to 14 percent since September, although economists consider a significant increase to be the correct answer, according to the Standard. President Erdogan wants to use it to boost exports, credit and growth before the election in 2023.
