Fed, Erdogan Explain 90% of the Turkish Lira’s Meltdown

(Bloomberg) -- Bloomberg Economics estimates the political takeover of the Turkish central bank and higher U.S. rates explain most of the lira’s 40% decline against the dollar this year. Negative sentiment is the main driver -- it turned sour in March after the unexpected dismissal of the central bank governor and intensified recently as a result of politically-motivated cuts in interest rates. The global environment is also working against the lira, with higher U.S. interest rates pulling the currency down. 

Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.

©2021 Bloomberg L.P.