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Turkish lira drops to historic low amid Ankara's tensions with West

Monday, 25 October 2021 11:30 AM [ Last Update: Monday, 25 October 2021 11:36 AM ]

A screen shows rates at a currency exchange agency near Taksim square in Istanbul, on October 25, 2021. (Photo by AFP)

Turkey's national currency lira has plunged to a new record low following President Recep Tayyip Erdogan’s comments amid rising tensions between Ankara and the West.

Media reports said on Monday that lira, one of the worst performing emerging market currencies in recent years, was closing in on 10 to the US Dollar, a rate it has never reached in the past.

Erdogan said on Saturday that he had ordered the expulsion of the ambassadors of the United States, Germany, and eight other countries.

The foreign powers triggered Erdogan's ire after demanding that Ankara release a Parisian-born Turkish political activist who has been in jail for years.

Erdogan: Turkey to banish ambassadors of 10 Western countries over call for release of rights activist

The Turkish president has ordered the expulsion of ambassadors from 10 countries, including the United States.

In a joint statement on October 18, Canada, Denmark, Finland, France, Germany, the Netherlands, New Zealand, Norway, Sweden and the US accused Ankara of delaying the legal cases lodged against Osman Kavala.

The dramatic developments triggered the fall of lira against other currencies.

Meanwhile, financial experts have attributed weakening of the Turkish currency to other factors as well.

The lira had already suffered a terrible week after Turkey was placed under surveillance for allegedly failing to properly address issues related to money laundering and terrorism financing.

There were also growing concerns over Ankara's monetary policy and alleged Central Bank interference by President Erdogan.

The Central Bank cut the policy rate from 18 percent to 16 percent on Thursday even as inflation surged to nearly 20 percent in September.

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