Turkish lira hits another historic low amid pandemic

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People wearing face masks to protect against the spread of coronavirus, walk in Ankara, Turkey, Thursday, Aug. 6, 2020. Turkey’s interior ministry announced new measures Wednesday to curb the spread of COVID-19 as daily confirmed cases peaked above 1,000. (AP Photo/Burhan Ozbilici)

LONDON (AP) — Turkey’s currency tumbled further Friday, hitting another record low.

The Turkish lira dropped to 7.3677 against the dollar before making a recovery. The lira is down about 19% versus the U.S. currency since the beginning of the year. It was trading around 7.17 on Friday afternoon.

The drop is fueled by high inflation, a wide current account deficit and the Turkish government’s push for cheap credit to drive an economy that was already fragile before the COVID-19 pandemic hit.

Analysts have expressed concerns over the level of Turkey’s reserves and Turkish President Recep Tayyip Erdogan’s aversion to high interest rates.

Turkey had been hoping for an influx of foreign currency through exports and tourism revenues, but the pandemic has sharply undermined the tourism industry and disrupted global commerce.

Speaking after Friday prayers at the recently reconverted Hagia Sophia mosque in Istanbul, Erdogan said “there are serious zigzags in the global economy after the pandemic.”

He added: “I believe the Turkish lira will fall into place … these are temporary fluctuations.”

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