Economist Podcasts Swimming against the currency: Turkey
May 21, 2020
Piotr Zalepski, The Economist's Turkey correspondent, discusses Turkey's economic turmoil, including a weakened lira and the challenges posed by a central bank lacking independence. Charlotte McCann, a staff writer and author, explores the evolution of online dating during lockdowns, revealing a shift toward deeper emotional connections amidst social distancing. They also touch on the worrying implications of COVID-19 transmission from humans to primates, highlighting conservation challenges as human interactions increase.
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Turkey's Monetary Policy
- Turkey's central bank has been cutting interest rates to boost growth, but this has weakened the lira.
- President Erdogan's belief that high interest rates cause inflation contradicts conventional economic theory.
Lira's Decline
- The lira's decline is partly due to Turkey's vulnerability to external shocks and high corporate debt.
- The central bank's lack of independence and misguided policies further destabilize the currency.
Depleted Reserves
- Turkey's central bank has depleted its dollar reserves by selling them to prop up the lira.
- A currency swap agreement with Qatar provides some relief, but the lira remains vulnerable.
