Turkish lira hits record low amid political crisis

Turkish lira hits record low amid political crisis
Mon Jan 6, 2014 21:06:53

The Turkish lira has plunged to a new low against the dollar, as a high-level corruption scandal shakes Prime Minister Recep Tayyip Erdogan's pro-business government.

The lira fell to 2.1947 dollar on Monday, after dropping to 2.18 on Thursday and 2.17 on Friday.

"We are faced with a significant challenge ... Whether or not the legal developments have (a) negative impact on foreign direct investment, we will see, but we are committed to improving the investment climate," Finance Minister Mehmet Simsek told.

Simsek said that the fall of the lira would "obviously have some negative implications" for the Turkish economy.

"The bottom line for the first half of 2014 is slower growth, more modest growth, on the back of (US Federal Reserve) tapering and domestic political and economic conditions," he said.

On December 25, 2013, Erdogan announced a major cabinet reshuffle replacing 10 ministers including the economy, interior, and environment ministers, who had resigned from their posts after their sons were arrested in the scandal.

The political crisis engulfing Erdogan has cost the economy $100 billion, a top official said a few days ago.

Erdogan has accused US-based cleric, Fethullah Gulen, of instigating the corruption investigation.

Gulen is an influential figure in Turkey and reportedly has many followers in some arms of the country’s state apparatus such as the judiciary, the police and secret services.

Erdogan, struggling to keep his grip on power after 11 years, has vowed he would survive what he has branded a "dirty" plot to try to topple him.


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