Turkish currency and inflation crisis

Beginning with a sharp lira sell-off in August 2018 tied to a diplomatic dispute with the US and concerns over corporate dollar debt, Turkey entered a prolonged currency and inflation crisis driven substantially by President Recep Tayyip Erdoğan's unconventional insistence that high interest rates cause rather than cure inflation. The central bank cut rates through 2021-2022 even as inflation accelerated, and the lira lost roughly 80% of its value against the dollar between 2018 and 2023. Official inflation peaked above 85% in late 2022, with independent estimates running even higher, eroding household purchasing power severely before a policy reversal toward orthodox rate hikes began in mid-2023 following Erdoğan's re-election.