The Turkish stock exchange suspended trading after the national currency fell below 17 lira per US dollar on Friday. The lira has lost more than half of its value against the US dollar since the beginning of 2021.
“As of 16.24 (Istanbul time) transactions have been temporarily halted on the market of all shares of our stock exchange,” the exchange said in a statement.
The country’s currency has collapsed amid pressure from President Recep Tayyip Erdogan on the central bank to lower borrowing costs to boost the growth of Turkey’s struggling economy.
On Thursday, the Turkish central bank announced it was cutting the key interest rate from 15% to 14%, despite inflation running at 21%.
Since September, central bank has cut the key interest rate by 400 basis points. Over the past two years, the regulator has intervened three times to keep the lira afloat by selling dollars.
The state monetary policy, along with significant lira depreciation, will further weigh on inflation – it is expected to skyrocket to 30% year-on-year in early 2022, according to S&P Global Ratings, which has downgraded its outlook on the nation’s sovereign credit rating to negative.
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