Turkish President Erdogan Orders Investigation into Possible Manipulation of Lira's Sharp Decline Crisis

President Recep Tayyip Erdogan of Turkey
[Photo by AFP Yonhap News]

[Asia Economy Reporter Park Byung-hee] Turkish President Recep Tayyip Erdogan recently ordered an investigation into the possibility of currency manipulation amid the sharp decline of the Turkish lira, major foreign media reported on the 27th (local time).

On the same day, President Erdogan instructed the National Supervisory Board to identify institutions that purchased large amounts of foreign currency and to determine whether currency manipulation occurred. The National Supervisory Board is an audit body that can report directly to the president.

The value of the lira has plummeted by about 40% compared to the beginning of this year. In particular, it has hit record lows daily, falling about 20% over the past week. On the 23rd, the dollar-lira exchange rate broke the 12 lira per dollar mark for the first time in history.

The sharp decline in the lira's value was directly caused by the Turkish central bank's interest rate cuts, which were further fueled by President Erdogan's public support for lowering interest rates.

President Erdogan has repeatedly stated that "high interest rates are the mother of all evil," openly demanding the central bank to lower the benchmark interest rate.

Accordingly, the central bank lowered the benchmark interest rate from 19% to 18% in September, from 18% to 16% in October, and again cut it by 1 percentage point to 15% on the 19th.

This content was produced with the assistance of AI translation services.