Turkish Lira reach record low on Tuesday at 10.50 to Euro

The Turkish Lira on Tuesday hit record lows against the euro and the dollar after Turkey's President Recep Tayyip Erdogan told the press that interest rates must be cut.

The lira was 10.50 to the euro, and reached at one point a record 8.7 to the dollar after president Erdogan’s announcement.

These remarks are carefully timed: The Turkish Statistics Authority (TurkStat) will on Wednesday announce the latest rate for inflation. Last month, the rate reached 17.14 per cent. 

Reducing the interest rate would cause the currency to fall further, and inflation would worsen.

The high rate of inflation has made food and necessities unaffordable to a large part of the Turkish population, of which about one third is living below the poverty line.

The next meeting of the central bank’s monetary policy committee will be on June 17. A rate cut is expected by most analysts at that time.