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Opposition leaders take action as Turkish lira drops to record low

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Opposition party leaders have started to take action to stop the depreciation of the Turkish lira, which weakened to a record low of 13.49 to the US dollar on Tuesday, before recovering to 12.45 around 5 p.m., following President Recep Tayyip Erdoğan’s public statements defending central bank’s policy rate.

Former Turkish prime minister and current leader of the opposition Future Party (GP) Ahmet Davutoğlu on Tuesday called on political party leaders and citizens to “start an economic war of independence” as the lira crashed by 8 percent in a day and near 40 percent in total this year.

“This is no longer ignorance, but treachery! I call on leaders of all political parties and our beloved nation to start an economic war of independence,” Davutoğlu, a former heavyweight from the ruling Justice and Development Party (AKP), said in a tweet.

He was referring to Erdoğan’s remarks a day earlier in which the president said his AKP government would “emerge victorious from this economic war of independence,” in reference to Turkey’s War of Independence, which was fought between 1919 and 1923 and led to the foundation of the Turkish Republic on the ashes of the Ottoman Empire under the leadership of Mustafa Kemal Atatürk.

Erdoğan, who is widely criticized for subscribing to the unorthodox belief that high interest rates cause high inflation instead of slowing it down, is blamed by many for the lira devaluation against the dollar due to his control over the central bank.

Under pressure from Erdoğan, the bank cut its policy rate last Thursday by 100 basis points to 15 percent, well-below inflation of nearly 20 percent, and signaled further easing, prompting the depreciation of the lira against the US dollar.

The bank has slashed rates by 400 basis points since September in what many analysts say is a risky policy mistake. Société Générale said it would need to deliver an emergency hike as soon as next month.

Davutoğlu further stated that he would meet with main opposition Republican People’s Party (CHP) leader Kemal Kılıçdaroğlu at 5 p.m. on Tuesday and nationalist İYİ (Good) Party leader Meral Akşener at 2:30 p.m. on Wednesday to talk about the country’s economic woes.

Akşener decided to hold an extraordinary meeting at 6 p.m. on Tuesday, and co-leaders of  the pro-Kurdish Peoples’ Democratic Party (HDP) Pervin Buldan and Mithat Sancar also called their party’s Central Executive Board (MYK) for an emergency meeting at 11 a.m. on Wednesday to discuss the same agenda.

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