Turkish national currency falls to record low against US dollar

The Turkish lira has fallen to a record level against the US dollar. During the trading session on Thursday, October 14, the Turkish national currency rate was traded at 9.18 lira per one US dollar.

Such a dramatic change in the exchange rate of the Turkish currency in the market is connected with the news about the dismissal of three high-ranking officials of the Central Bank, including two deputy governors of the Central Bank of Turkey - Semih Tumen and Ugur Namik Kucuk. The relevant decree was signed by Turkish President Recep Erdogan. 

The Turkish lira continues to fall after the Turkish Central Bank cut its interest rate from 19 to 18 percent. In addition, Erdogan's statements about a possible military offensive in Syria to fight Kurdish troops contribute to the weakening of the national currency.

In early October, it was reported that Recep Erdogan had lost confidence in Central Bank Governor Sahap Kavcioglu. The head of state was disappointed with the slow implementation of his requirement to ease the monetary policy. In general, over the past few years, four people have been replaced at the post of the Central Bank Governor of Turkey. Kavcioglu chaired the Central Bank in March 2021.

Prices in Turkey have been growing rapidly, whereas the inflation rate in September amounted to 19.58 percent. One of the reasons for it was a rise in prices on electricity - up to 22.77 percent compared to 20.72 percent in August. To crown it all, Turkey imports nearly all natural gas that it consumes, as gas serves as the main source of energy in Turkey.