Unrelenting inflation and the uncontrollable slump of the Turkish lira have forced Ankara to start cooling the economy, only two months after it spurred a loan bonanza to revive consumer demand and breathe life into pandemic-ravaged businesses. The abrupt reversal heightens political risks for President Recep Tayyip Erdogan as he faces growing popular frustration over economic woes that have only worsened since a severe currency shock in 2018.
The lira took another dramatic nosedive Aug. 6-7, forcing the central bank to begin curbing liquidity and heralding the end of the fledgling attempt to warm up the economy.