Turkey’s lira depreciated to a record against U.S. dollar on Nov. 3 due to several factors, ranging from domestic economic concerns, geopolitical tensions, and fear over the victory of Joe Biden in the U.S. presidential elections.
The lira touched a fresh record low of 8.52 against the dollar as of 3.30 p.m. local time, whereas it was trading at 9.97 to the euro.
Turkish President Recep Tayyip Erdoğan had said on Oct. 31 that Turkey was fighting an economic war against a “devil’s triangle” of interest rates, inflation and exchange rates.
“Our response to those who work to besiege our country in the economic sphere is a new war of economic liberation,” Erdoğan had said.
The lira has depreciated more than 30 percent this year on concerns about possible Western sanctions against Turkey, depleted reserves, double-digit inflation and monetary independence.
Analysts say the relationship between Ankara and Washington could be further strained if Biden wins the U.S. presidential election on Nov. 3.
The central bank unexpectedly held interest rates steady last month at 10.25 percent, below the level at which inflation has remained all year. Double-digit price rises and negative real rates have in part pushed the lira currency to record lows.