© Reuters. The Turkish lira recovers 3% after yesterday’s historic crash
Istanbul, Nov 24 (.) .- The Turkish lira has reversed its downward path on Wednesday and has recovered 3% in the first hours of trading compared to the historic drop of 11% yesterday.
Although the day started down, reaching the minimum of 14.7 lira per euro set yesterday, the trend then reversed and around 11.00 GMT the Turkish currency was changed to 13.9 units per euro and 12.3 per dollar.
The historic collapse on Tuesday, which even prompted a statement from the Central Bank to warn against businesses with securities “unrelated to economic bases,” had begun on Monday when the country’s president, Recep Tayyip Erdogan, defended that a low interest rate Helps control runaway inflation.
The Central Bank cut rates from 16% to 15% last Thursday, well below year-on-year inflation, which is close to 20%.
This policy has led to a devaluation of the lira that triggers consumer prices, because even Turkish local products depend on the foreign exchange market, due to the fact that the country imports many raw materials, as well as fuel and energy.
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