Since the beginning of the year the lira has weakened by about 11% and since the beginning of this month it has lost over 2%. All this is happening despite the central bank raising interest rates significantly since President Erdogan was elected for another term in May of last year. 

The interest rate hike is failing to curb inflation partly due to the continuation of unrestrained government spending.

The expectation is that the lira will weaken further this year to around 40 per dollar. This expectation also does not help the lira as the Turks trying to protect their wealth prefer to purchase dollars, gold, vehicles and more.