Lira crisis: more than 21 percent inflation in Turkey

Status: 03.12.2021 1:38 p.m.

The bad news for the Turkish economy continues. According to the statistics agency, inflation has risen again. And the country’s central bank has to intervene again.

By Karin Senz, ARD-Studio Istanbul

21.3 percent, that is the official value of the Turkish inflation in November compared to the previous year. Inflation has not been this high in three years. Food has even become 27 percent more expensive during the period. However, the opposition and critical experts assume that inflation will be up to twice as high.

Karin Senz
ARD-Studio Istanbul

Creditworthiness downgraded

The rating agency Fitch lowered the outlook for Turkey’s creditworthiness from stable to negative. She referred to monetary policy easing, which Fitch believed came too early. This creates less trust, as the lira rate shows. The Turkish currency has lost well over 40 percent of its value since the beginning of the year.

The central bank in Ankara gave the lira a helping hand for the second time this week. On their homepage it is said that dollars have been sold – because of unhealthy pricing at exchange rates.

Erdogan is sticking to his course

President Recep Tayyip Erdogan has been criticized for being primarily responsible for the poor exchange rate and the high inflation. He insists on a low key interest rate, which he believes will stimulate the economy and counteract inflation. However, this contradicts the current opinion of most economic experts.

Bad news about the Turkish economy continues

Karin Senz, ARD Istanbul, December 3, 2021 12:41 p.m.

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