Turkey’s currency plummets to historic low

Turkey’s currency fell to a record low Friday amid political controversy and more changes at the Central Bank. 

The Turkish currency dropped to 8.61 liras to the US dollar at one point Friday — the lowest in 10 years, according to the currency data website XE, which had the lira slightly strengthening to 8.57 to the dollar later in the day.

The lira has been spiraling downward since March when the governor of Turkey’s Central Bank was abruptly fired, which led to greater distrust of Ankara’s handling of its economy. 

There was a four-day slide this week, which Reuters attributed to opposition parties calling for early elections, prosecutors calling for charges against Istanbul’s mayor and exiled mob boss Sedat Peker alleging criminality on the part of numerous government officials. 

Turkey’s Central Bank also replaced the directors of the banking, research and statistics departments Thursday, the Bloomberg news agency reported. This followed Turkish President Recep Tayyip Erdogan's firing of one of the bank’s deputy governors earlier this week. 

Central Bank Governor Sahap Kavcioglu is in a difficult position. Erdogan opposes increasing interest rates. However, if Kavcioglu lowers rates, the lira will plummet further, a political risk analyst told Al-Monitor this week. 

The coronavirus lockdown and high inflation are also hurting the economy.