The Turkish lira fails to rebound nearly a week after the central bank governor and, on Monday, his deputy were sacked. The dollar stands at 8.27 pounds and the euro at 9.69 pounds. Since the start of the year, the greenback has gained 12.5% against the Turkish currency and the European currency 8.7%. To reassure the markets, the new central bank governor Sahap Kavcioglu recalled that the objective of reducing inflation to 5% was maintained. Price increases are currently evolving at an annual rate three times higher.
The next statistics published in early April could see this figure rise further to around 17%, in particular due to the drop in the pound, which is increasing inflation. It would be accompanied by a drop in activity due to high interest rates in Turkey – currently at 19%, the highest among emerging countries – and the persistent global health crisis. This scenario of “stagflation” (economic slowdown and inflation) weighs on the Turkish currency.