Counting the costs of the lira’s failed defence

PREDAWN POLICECHP operations in Turkey are nothing new, but some still raise eyebrows. Under the cover of darkness on April 13th, police officers across the country took down giant banners hanging from offices of Turkey’s main opposition party, the Republican People’s Party (). “Where is the $128bn?” the offending signs read.The $128bn is the amount of foreign-currency reserves bankers and analysts reckon has been squandered by Turkey’s central bank in its attempt to prop up the lira over the past couple of years. (Comprehensive official figures are not published.) The government, headed by Recep Tayyip Erdogan, has little to show for the policy, thought to be spearheaded by Mr Erdogan’s son-in-law, a former finance minister. Since the start of 2019, when the interventions began, the lira has lost over 35% against the dollar, the result of inflation, low real interest rates and a string of political crises.