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Lira crashes to record lows piling inflationary pressure on Turkey

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Turkey's president Recep Tayyip Erdogan. Photo: Alessia Pierdomenico/Bloomberg

Turkey's president Recep Tayyip Erdogan. Photo: Alessia Pierdomenico/Bloomberg

Turkey's president Recep Tayyip Erdogan. Photo: Alessia Pierdomenico/Bloomberg

Turkey's lira clawed back some losses yesterday after a 15pc crash to record lows a day earlier driven by President Tayyip Erdogan's defence of rate cuts, but volatility and steep price rises still worried consumers and investors.

The lira has hit new all-time lows for 11 consecutive sessions and its losses against the dollar this year stand at 40pc, with a 19pc decline since the beginning of last week alone.

Bankers said liquidity had virtually dried up with moves to the record low of 13.45 driven by panic dollar buying.

Many Turks, already grappling with inflation of around 20pc, fear price rises will accelerate.

Opposition politicians have accused Mr Erdogan of dragging the country into crisis.

Retailers too are struggling with the turmoil, with some websites stopping sales of electronic products yesterday.

A sales representative at an Istanbul Apple store said people were thinking of electronics as an investment as much as items to use.

"It is pretty surreal with the economy and all, but people see it as a store of value," the representative said.

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