By May 3, 2018
Turkish currency traders huddled in a tiny back street outside Istanbul’s Grand Bazaar on Thursday, seeking euros and dollars. The lira has sunk to a new record low after the government said inflation is running higher than expected. Three dozen men with walkie-talkies and cellphones barked out orders at the open-outcry exchange at Tahtakale, an informal currency market located outside the 15th century bazaar that is the symbolic heart of Turkey’s financial world.
The lira has taken a battering this year, losing about 10% of its value amid worries the country’s impressive growth rates are fueled by unsustainable stimulus spending and onerous borrowing, overheating the economy.
But President Recep Tayyip Erdogan is likely to keep his foot on the gas as he campaigns for re-election after pulling forward presidential and parliamentary polls by 17 months to June 24. This week, the government promised some $6 billion in debt relief and social security spending to win over voters.
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