Turkish lira slips to new low as Erdogan forms economic team

Al-Monitor Staff

May 30, 2023

Men drink chai in the street the day after President Recep Tayyip Erdoğan was re-elected on May 29, 2023 in Istanbul,Turkey. Erdogan won another five-year term after being forced into a runoff with the opposition politician Kemal Kilicdaroglu. Erdogan prevailed despite criticism of his management of the country's economy and the government's response to the devastating earthquakes earlier this year. (Photo by Jeff J Mitchell/Getty Images) — Men drink chai in the street the day after President Recep Tayyip Erdoğan was re-elected on May 29, 2023 in Istanbul,Turkey. Erdogan won another five-year term after being forced into a runoff with the opposition politician Kemal Kilicdaroglu. Erdogan prevailed despite criticism of his management of the country's economy and the government's response to the devastating earthquakes earlier this year. — Jeff J Mitchell/Getty Images

ANKARA — The Turkish lira plummeted to a new record low on Tuesday morning, continuing its slip after Turkish President Recep Tayyip Erdogan’s election victory extended his reign into a third decade. All eyes are now on the new economy team Erdogan is expected to unveil on Friday along with other members of his cabinet.

The Turkish currency plummeted to a record low of 20.40 against the greenback on Tuesday by 2 p.m. local time, according to the currency data website Xe. Since the beginning of the year, the Turkish lira has lost another 7% of its value.

Turkey’s embattled lira sank to historic lows following the Central Bank’s unorthodox interest rate cuts under the influence of Erdogan’s unconventional economic views, bringing the rates as low as 8.5%.

In contrast, Turkey’s peers within the G20 group have raised interest rates to balance the impact of the Ukrainian war-fueled price hikes.