Turkish lira falls after Erdogan defends interest rate cuts

Turkey’s economic crisis entered a turbulent new phase, with the currency plunging to a new record low and President Recep Tayyip Erdogan preparing to meet the leader of a regional rival in search of foreign investment.

The lira fell as much as 12% on Tuesday, threatening to shake the economy further by undermining confidence, making it more difficult for companies to repay foreign currency debt and raise the prices of imported goods, especially oil. This will push the inflation rate, which is currently around 20%, even higher, and further hurt households, analysts say.

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