The dollar value of the Turkish lira fell as much as 50% in the last three months, before partially recovering. As FX volatility escalates, policymakers have shown little appetite to step in to stabilise the currency. In fact, measures by the central bank, under pressure from President Erdoğan, have actively fuelled the currency’s sharp devaluation rather than stem it. Investors are becoming increasingly bearish towards the lira, as confidence in the credibility and independence of the central bank wanes and relations with the West remain strained.
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