Turkish Lira rate: Turkey on verge of economic crisis as currency hits record low... but Erdogan tells people to 'have no worries'

President Recep Tayyip Erdogan pictured making a speech on Saturday
AFP/Getty Images
James Morris10 August 2018

Turkey could be on the brink of an economic crisis after the lira hit a new record low.

The lira stood at 5.75 against the dollar on Friday morning, weakening even further from Thursday’s 5.55.

Credit rating agency Fitch said Turkey “needs to halt the sharp slide of the lira quickly”. It has lost about 30 per cent of its value against the dollar since the New Year.

The decline comes on the back of Turkey’s widening rift with the United States.

Turkey and the US have been at loggerheads over Andrew Brunson
AP

The countries have been at loggerheads over the detention in Turkey of US evangelical pastor Andrew Brunson on terrorism charges.

It prompted US sanctions on two of president Recep Tayyip Erdogan's ministers and threats of trade restrictions. A Turkish delegation returned from Washington on Thursday with no apparent solutions.

But Mr Erdogan dismissed concerns over the tumbling lira, calling on Turks to "have no worries".

Turkish president Recep Tayyip Erdogan, pictured on Monday, was re-elected in June
EPA

Speaking to supporters late on Thursday, Mr Erdogan said: “There are various campaigns being carried out. Don't heed them.

"Don't forget, if they have their dollars, we have our people, our God. We are working hard. Look at what we were 16 years ago and look at us now."

Mr Erdogan, a self-described "enemy of interest rates", wants banks to lend cheap credit to fuel growth. But investors fear the economy is overheating and could be due for a hard landing.

Last week, Mr Erdogan called on Turkish citizens to convert their hard currency and gold into lira in order to prop up the plunging currency with a "domestic and national stance".

Additional reporting by Reuters

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