Jakarta –
Turkey’s currency slumped again to 8%. This is a record low in history.
Quoted from CNBC According to him, this condition occurred because Turkish President Tayyip Erdogan cut his benchmark interest rate to deal with inflation.
Because Erdogan has taken a policy of cutting interest rates by 500 basis points (bps) since September, the inflation rate has continued to soar to above 21%.
Even inflation in Turkey is predicted to penetrate up to 30% due to imports that continue to rise.
Tellimer economist Patrick Curran said the longer the currency crisis lasted, the harder it would be to get back on track.
“As long as Erdoan is still at the helm, no one can handle the fall of the lira,” he said.
He said this condition made the people of Turkey who deposit their funds in banks have to bite their fingers. Because of inflation.
Erdoan also announced that the minimum wage in Turkey would increase by 50%. To be 4,250 lira or the equivalent of US $ 275 per month next year. However, it is said that it will raise inflation to 3.5%.
Maxim Rybnikov, director of EMEA at S&P Global Ratings, said the latest minimum wage is still lower than the estimated $380.
A 100 bps rate cut by Turkey’s central bank last Thursday was said to have brought Turkey into the negative zone.
JPMorgan projects that interest rates will increase next year.
(kil/eds)
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