In the run-up to the Turkish elections in May, the Turkish central bank, in an attempt to get a more positive view of the economy, had heavily propped up the lira by selling dollars. Between 1 January and the polls, this amounted to 30 billion dollars (28 billion euros). According to traders, Turkey has now stopped selling dollars.
This is the twelfth consecutive day of loss of value for the lira. Since May 28, when the second round of the presidential election took place, the currency has already lost 12 percent against the dollar.
Turkish President Recep Tayyip Erdogan, known for his rather unorthodox monetary views, appointed Mehmet Simsek as the new finance minister on Saturday. It already appeared on Sunday that it wanted to return to “rational measures” to get the economy back on track. His priority is to tackle skyrocketing inflation, which stood at 39.6 percent on an annual basis in May, after peaking at 85 percent last year.