Turkish lira hits 9.75 to euro as inflation near 18%

The Turkish lira dropped to as low as 9.75 to the euro on Wednesday, March, 31 close to a record low with the dollar rate at 8.33 close to the record low of 8.53 and the British pound at 11.44.

Economists predicted that there is likely to be a currency crisis by late May to June which might force Turkey to adopt capital controls, but the Turkish government in a recent statement claimed that this could not happen.

The recent drop in exchange rate came following the sacking of former Central bank governor, Naci Agbal on March 20 who was replaced by Sahap Kavcioglu.

With inflation currently at about 16 per cent and the prices of food, electricity and other necessities on the rise, sources in Ankara report that the Turkish central bank intends to cut interest rates sharply at its April 15 policy meeting. 

Goldman Sachs expects inflation to rise to 18 per cent.