Growing tensions with the west and concern over central control of monetary policy has seen the Turkish lire tumble to a record low against the dollar, in a possible boon to holidaymakers.
It follows news the Trump administration is to review Turkey’s duty-free access to the US market, a move that could affect some $1.66 billion (£1.28 billion) of Turkish exports.
Fears of retaliatory trade tariffs have exacerbated the sell-off in the lire which has lost 27% of its value this year alone.
The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
The currency has been on the downward slide for months as relations with the West have steadily worsened and amid growing concern about President Recep Tayyip Erdogan's drive for greater control over monetary policy.
The Financial Times reports that in his push to keep Turkey’s economy growing, “the president has repeatedly demanded that the bank keep credit cheap, even with inflation stuck in the double digits since the start of the year”.
In a speech on Friday, Erdogan said Turkey was “face to face with an economic war”. He added: “Do not fear, we will emerge victorious”, urging Turks to cash in their under-the-mattress gold, euros and dollars to bolster the currency and “show their resistance to the world”.
“The best bet now is to expect further weakness in the lira” Per Hammarlund, chief emerging markets strategist at SEB, told Reuters.
“They should be doing more to support the lira, but in my view this will continue for a while longer and the lira will take another beating here” he added.
However, the record low lire could prove good news for travellers journeying to the country this summer, with foreign currencies stretching much further than previous years.
-
Will AI kill the smartphone?In The Spotlight OpenAI and Meta want to unseat the ‘Lennon and McCartney’ of the gadget era
-
Must-see bookshops around the UKThe Week Recommends Lose yourself in beautiful surroundings, whiling away the hours looking for a good book
-
A Nipah virus outbreak in India has brought back Covid-era surveillanceUnder the radar The disease can spread through animals and humans
-
EU and India clinch trade pact amid US tariff warSpeed Read The agreement will slash tariffs on most goods over the next decade
-
Israel retrieves final hostage’s body from GazaSpeed Read The 24-year-old police officer was killed during the initial Hamas attack
-
China’s Xi targets top general in growing purgeSpeed Read Zhang Youxia is being investigated over ‘grave violations’ of the law
-
Panama and Canada are negotiating over a crucial copper mineIn the Spotlight Panama is set to make a final decision on the mine this summer
-
Why Greenland’s natural resources are nearly impossible to mineThe Explainer The country’s natural landscape makes the task extremely difficult
-
Iran cuts internet as protests escalateSpeed Reada Government buildings across the country have been set on fire
-
US nabs ‘shadow’ tanker claimed by RussiaSpeed Read The ship was one of two vessels seized by the US military
-
How Bulgaria’s government fell amid mass protestsThe Explainer The country’s prime minister resigned as part of the fallout
