The Turkish lira hit yet another record low on Oct. 22 amid growing concerns about the economy's health, as it dropped to 9.66 against the U.S. dollar.
Although the Turkish lira has been plunging for many weeks now amid concerns about the deteriorating economy, its loss has accelerated following President Recep Tayyip Erdoğan's interference in the Central Bank.
Erdoğan, a self-described “enemy” of high-interest rates, fired three members of the Central Bank's monetary policy committee last week. The fired staff included the only person to oppose a decision last month to cut rates.
Afterwards, the bank slashed its key interest rate from 18 percent to 16 percent on Oct. 21, defying warnings from the business world and opposition parties that it must act in line with its independent mandate, and not the wishes of Erdoğan.
Later on Oct. 21, in a decision that could further erode foreign investment in Turkey after a years-long exodus, the Financial Action Task Force (FATF) downgraded Turkey to a so-called grey list for failing to head off money laundering and terrorist financing.
Foreign investors have fled Turkey in recent years, citing political interference in monetary policy, double-digit inflation and low official foreign currency reserves.