What happened? The Turkish lira fell nearly 15% on Tuesday after President Recep Tayyip Erdogan verbally defended the country's recent sharp interest rate cuts and vowed to win his "economic war for independence." The Turkish head of state put pressure on the central bank to keep interest rates low so that he could increase exports, foreign investment and employment. He is doing this, although inflation in the country has jumped to almost 20%, the national currency has depreciated and the income of the country's population is falling sharply. Why is this important? Today's collapse is the biggest daily depreciation of the pound since the head of the central bank was fired in March. For the past year, the Turkish national currency has lost about 45% of its value, with the collapse being 26% since the beginning of last week alone. Former Turkish Central Bank Deputy Governor Semih Tumen, who was released by Erdogan last month, has called for an immediate return to policies that protect the value of the pound.
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