The lira is on the way to a new collapse after Erdogan’s shocks


Urgent: The lira is on the way to a new collapse after Erdogan's shocks

Turkish President Recep Tayyip Erdogan did not allow the lira to get more air after the fateful decision of the Turkish Central Bank to intervene to save the collapsed situation.

A few hours after the Turkish Central Bank’s decision to intervene, everyone was surprised by a new decision by President Erdogan….

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lira now

The lira fell again against the dollar, after recovering yesterday, Wednesday, after the decision to intervene by the Turkish Central Bank to support prices and stop the decline.

The Turkish lira is declining only within 2%, down to levels of 13.55 lira / dollar against the dollar, after its rise yesterday, Wednesday, within 0.3%.

Last November, the Turkish lira recorded record losses, perhaps the worst in its history, as it lost more than 40% of its value.

A shocking surprise of high caliber.. bankruptcy

And the lira fell last month from levels of 9.6 pounds / dollars to levels of 13.47 pounds per dollar.

On the other hand, since the beginning of the year that is about to run out, the Turkish lira has fallen from levels of 7.43 lira / dollar at the close of the end of December 2020 to levels of 13.55 lira / dollar during today’s trading, a decline of 82%.

Yesterday, Wednesday, the Turkish lira hit a new all-time low at 13.8760 lira / dollar

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New Finance Minister

In the early hours of Thursday morning, Turkish President Recep Tayyip Erdogan appointed Noureddine Nabati as Minister of Treasury and Finance.

This came after he accepted the resignation of Lutfi Elvan, the last senior official who was considered committed to tightening monetary policy in a government suffering from a currency collapse.

Elvan’s departure represents the latest change in the rapid replacement and replacement of major economic positions in Turkey.

These included Erdogan’s abrupt dismissal of three central bank governors in another two to two and a half years, moves seen as having shaken the credibility of Turkey’s policymaking.

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Economic analysts said mismanagement and policy uncertainty pushed inflation into the double digits.

It pushed the official foreign exchange reserve to decline and the lira lost two-thirds of its value in four years, in the sharpest decline, and by a large margin, for a currency in emerging markets.

And with the Turkish Central Bank turning in September to a position that tends to ease monetary policy.

Elvan was seen as one of the last ministers who could persuade Erdogan to reconsider that policy in light of what analysts see as the damage to the bank’s credibility.

The uncertainty surrounding a new economic model in which Erdogan advocates further rate cuts despite rising inflation prompted the central bank to intervene on Wednesday to restore stability to the volatile currency for the first time since 2014.

Urgent: Important Warning

kill support

The Turkish Central published a statement announcing its direct intervention in the exchange market of the Turkish lira, which resulted in a drop in the price of the dollar-lira pair at these moments, i.e. an increase in the value of the Turkish lira.

The Turkish Central Bank issued a press statement announcing a direct intervention in the foreign exchange rate, justifying that it was trying to control the formation of unhealthy exchange rates.

The central bank said that it directly intervened in the market in support of the selling trend of foreign exchange currencies, to give more strength to the Turkish lira against the US dollar and the euro.

The central bank’s intervention by selling foreign currencies in support of the lira comes for the first time in seven years.

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Turkish President Recep Tayyip Erdogan said he would never be a champion of high interest rates, and the Turkish president added that there was no logical explanation for the strong appreciation of the dollar.

Erdogan added that the 20% rise in inflation is a matter that can be addressed quickly and immediately.

He stressed that the path taken by Turkey and the Turkish economy recently may have a percentage of risks, but it is certainly the right path.

The Turkish president ordered the opening of investigations into the rise in the price of the Turkish lira, which he deems unjustified and does not depend on economic foundations.

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