Shoppers walk the aisles of a market in Konya, Turkey. The country is experiencing brutal inflation, with food and non-alcoholic beverage prices up 70.3% year-over-year in March.
Diego Cupolo | Nurphoto | beautiful pictures
Inflation in Turkey jumped nearly 79% last month, the highest the country has seen in a quarter of a century.
According to the Turkish Statistical Institute, the annual inflation rate was 78.62% in June, beating forecasts. The monthly increase is 4.95%.
Soaring consumer prices have hit 84 million people hard, with little hope of improvement in the near term due to the aftermath of the Russo-Ukrainian war, high energy and food prices, and the lira, the currency. country depreciated sharply.
Transportation prices rose 123.37% year-over-year, and food and non-alcoholic drinks prices rose 93.93%, according to government data.
Turkey has achieved rapid development in previous years, but President Recep Tayyip Erdogan over the past few years have refused to raise rates meaningfully to cool down inflation, describes interest as “the mother of all evil.” As a result, the Turkish lira fell sharply and the spending power of the average Turkish citizen was much less.
Erdogan has instructed the country’s central bank – which analysts say is not independent of him – to repeatedly cut borrowing rates in 2020 and 2021, even as inflation continues to rise. Central bankers who expressed opposition to this action were fired; in the spring of 2021, the central bank of Turkey has seen four different governors in two years.
The country’s interest rates fell gradually to 14% last fall and have remained unchanged since. The lira has fallen 44% against the dollar last year and is down 21% against the greenback since the start of this year.
The Turkish government has introduced unorthodox policies to try to maintain the lira without raising interest rates. At the end of June, Turkey’s banking regulator announced a ban on lending in lira For companies holding what they consider to be too much foreign currency, this has boosted the currency for a short time but has caused more uncertainty for investors who question its sustainability. sustainability of this measure.
