The latest desperate attempt to prop up the Turkish lira

Recep Tayyip Erdogan will support anything but raising interest rates

(220610) -- ISTANBUL, June 10, 2022 (Xinhua) -- People are seen at a foreign exchange office in Istanbul, Turkey, on June 9, 2022. Turkey's lira accelerated its downward spiral on Wednesday after Turkish President Recep Tayyip Erdogan reaffirmed on Monday his pledge to further cut interest rates and ease borrowing. One dollar was traded at 17.15 Turkish liras at 13:05 local time (10:05 GMT), losing 2.5 percent of its value in a single day, bringing its total losses to almost 100 percent compared with a year ago. (Photo by Unal Cam/Xinhua)

Jun 30th 2022|ISTANBUL

In turkey, the abnormal is the new normal. If official figures are to be believed, annual inflation now exceeds 73%. If Turkish consumers are to be believed, it is much higher. Measured against the dollar, the lira resembles a black-diamond ski slope. The currency has lost a fifth of its value against the greenback since the start of the year. The obvious solution would be a dramatic increase in interest rates. But the country’s president, Recep Tayyip Erdogan, refuses to allow the central bank to tighten monetary policy.

This article appeared in the Finance & economics section of the print edition under the headline “Creeping controls”