For years, Turkey has grappled with persistently high inflation rates, posing significant challenges to its economy. This enduring issue has been influenced by a combination of factors, beginning with the substantial depreciation of the Turkish lira against major currencies. This currency devaluation has led to increased costs for imports, subsequently driving up domestic prices for goods and services. Moreover, the implementation of expansionary fiscal policies, characterized by heightened government spending and stimulus measures, has further exacerbated inflationary pressures by fueling demand within the economy. Additionally, Turkey faces hurdles in effective monetary policy implementation due to political interference and inconsistent policy decisions, limiting the central bank's ability to control inflation through interest rate adjustments.
We wanted to draw attention to the magnitude of the currency devaluation and the challenge it poses in predicting currency rates. If you want to get more information about the topic, check out this Euronews article about it.