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Turkish Lira Plunges Sharply Against US Dollar

in International Business

Turkish Lira Plunges Sharply Against US Dollar

Facing the sudden rise of the U.S. dollar against the Turkish currency overnight on Monday, Turkish citizens expressed their concerns over the turbulence in markets.

The local currency lira plunged around 11 percent early in the morning after the discharge of Naci Agbal, the central bank governor, in a presidential decree signed on Saturday.

In the morning trading, the lira was fluctuating at 8.02 against the greenback, a sharp decline from Friday’s closing level of 7.22. The Turkish currency was also down 11 percent against the euro.

Ekrem Yumlu is a shop owner in the central Taksim neighborhood on the European side of Istanbul, the country’s financial and cultural hub.

Yumlu, who has been selling imported alcoholic beverages for the last 40 years in the same shop, described the latest development as “very troublesome” for his business, as he buys his products in dollars and euros.

“This was not the worst that happened. We are getting ready for more critical days,” he said. “The country’s currency has lost 11 percent overnight. When we see its reflection on prices, we will experience a more severe slowing down in businesses.”

Due to the COVID-19 pandemic conditions, Yumlu already lost over 60 percent of his revenues during the past year. “The money in our pocket is losing its value. We are getting poorer and poorer,” Yumlu added.

Cengiz Saylan, 76, owns a visa office at the iconic Taksim Square.

“Our debt increased by at least 10 percent with the latest hike in the dollar,” he told Xinhua in his deserted office due to the COVID-19 pandemic. “Our business, which was already stagnant due to the pandemic, was badly damaged,” he lamented.

Meanwhile, there was a tense atmosphere in foreign exchange offices on the usually vivid Istiklal Street. Some of them darkened their digital boards, and none of them commented on the latest situation.

Turkey’s Treasury and Finance Minister Lutfi Elvan announced earlier in the day that Turkey will not compromise on the free-market mechanism, and will attach great importance to the efficient functioning of the markets.

“Liberal exchange regime will continue resolutely,” Elvan said in a written statement.

Turkish President Recep Tayyip Erdogan, who is opposed high-interest rates, sacked Agbal after the central bank imposed a 200-basis-point interest rate hike to fight double-digit inflation, with the benchmark policy rate rising to 19 percent.

Erdogan replaced Agbal with Sahap Kavcioglu, a former member of parliament for the ruling Justice and Development Party.


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Turkish currencyturkish lira

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