Why is Turkey's currency collapsing?
Business Daily
BBC
4.4 • 816 Ratings
🗓️ 25 November 2021
⏱️ 17 minutes
🧾️ Download transcript
Summary
Turkey's currency has been in free fall this week, reaching a record low against the US dollar. The Lira's collapse has been sparked, in part, by President Recep Tayyip Erdogan doubling down on his controversial economic policies, such as demanding that the central bank cut interest rates despite rapidly accelerating inflation.
Ed Butler explores why President Erdogan is so attached to the policy, at the expense of three central bank governors in the last three years, and asks what impact the currency crisis is having on Turkey's economy. Ed speaks to Gulcin Ozkan, professor of finance at King's College London, economist and former fund manager Mohamed El-Erian, and to a forlorn wealth manager in Istanbul.
Producer: Will Bain
(Picture: Turkish Lira notes; Credit: Getty Images)
Transcript
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| 0:00.0 | Hi there, I'm Ed Butler. |
| 0:04.5 | Welcome to Business Daily from the BBC. |
| 0:07.0 | Today, a message for Turks everywhere. |
| 0:10.3 | Be afraid. Be very afraid. |
| 0:12.7 | It's like watching a scary movie all over again. |
| 0:17.0 | And it basically involves the country losing control of its currency. |
| 0:21.9 | But is a full-blown currency crisis really on the cards for Turkey? |
| 0:26.2 | And what would that mean? |
| 0:27.5 | We are very close to a point where people stop using Turkish lira for their interactions. |
| 0:34.6 | And that might be obviously a crisis that you you know, you wouldn't want to even |
| 0:39.3 | contemplate. That's to come on Business Daily from the BBC. |
| 0:49.1 | Anger and for some a sense of panic in Istanbul this week. |
| 0:58.2 | Government resign, they shout, |
| 1:00.3 | as hundreds take to the streets in the midst of the worst currency crisis the country's seen in years. |
| 1:08.6 | Much of the anger is focused on the cost of living. |
| 1:11.8 | Turkey's lira has crashed to record lows, driven by the President's decision to demand cuts in the country's interest rates, |
| 1:19.0 | just as economists have been begging him to do the opposite. |
| 1:22.5 | Recep Tayyib Erdogan seems to believe that cheap credit is essential to keep the country going, |
| 1:28.4 | and he blames increasingly rampant inflation, not on his own behavior, but on predatory foreign |
| 1:34.3 | speculators, who are waging a war, he reckons, on Turkey's sovereign interests. |
| 1:42.2 | We have seen the same game in many international incidents and many platforms. |
| 1:47.8 | We have risen over every struggle we were engaged in by standing firm. |
... |
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