EconomyTurkey

Turkish lira hits new low amid corruption scandal

346718_Turkey-liraThe value of Turkey’s national currency, lira, has fallen to a new record low against the US dollar amid an ongoing corruption scandal plaguing the government of Prime Minister Recep Tayyip Erdogan.

The lira dropped to 2.24 against the dollar and 3.04 against the euro on Monday.

The Turkish Economy Minister Nihat Zeybekci, however, has rejected Lira’s plunge to be a sign of economic instability.

“I believe that the central bank should not hike interest rates because it would be an inconclusive step and put a permanent burden on our economy,” the Anatolia news agency quoted Zeybekci as saying.

The lira nosedive came after the corruption probe involving several governmental officials and prominent businessmen, which rocked Erdogan’s government and posed the biggest challenge to his 11-year rule.

The investigation broke out on December 17, 2013, after the premier’s allies were arrested on graft charges.

Erdogan was then forced to carry out a major cabinet reshuffle after three of his ministers resigned as their sons were detained in the probe.

The Turkish prime minister denounced the probe as a “dirty plot” to undermine his government ahead of the local elections in March and sacked hundreds of police chiefs in a major purge.

Erdogan has accused US-based cleric, Fethullah Gulen, of instigating the corruption investigation.

Gulen is an influential figure in Turkey and reportedly has many followers in some arms of the country’s state apparatus such as the judiciary, the police and secret services.

Gulen has denied any involvement in Turkey’s recent political crisis.

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