Following President Recep Tayyip Erdogan’s victory in the Sunday presidential election, the Turkish lira reached fresh record lows against the US dollar on Monday, further exacerbating the country’s economic challenges.

In early European trade, the lira weakened to 20.065 against the dollar, surpassing the previous record low set on Friday, CNN reported.

The currency has experienced a decline of approximately 7% since the beginning of the year and has lost over 90% of its value in the past decade.

Turkey’s economy has been plagued by volatile boom-and-bust cycles and persistent bouts of inflation.

In response to a currency crisis in 2021, Turkish authorities have increasingly intervened in foreign exchange markets, resulting in artificially small daily movements that mostly indicate a weakening trend.

However, these measures have been unable to prevent the decline of foreign exchange and gold reserves.

Benjamin Picton, senior macro strategist at Rabobank, noted that Erdogan’s victory has placed additional pressure on the Turkish lira, further contributing to its depreciation.

Written by staff