While the Turkish lira posted a record low, fueling market fears, President Erdogan is seeking reassurance. And this, while the governance and the action of the central bank are worrying.

While the Turkish lira seems to be in decline (-20% since the beginning of 2020), after having recorded a record low (7.3 Turkish lira against a greenback) against the dollar, President Recep Tayyip Erdogan is trying to reassure. "I am convinced that the Turkish lira will stabilize. These things are temporary, variations happen all the time," the Turkish president said at a press conference in Istanbul. After recording a new decline on Friday morning, the pound has regained colors in the wake of Mr. Erdogan's statements

"Turkey is standing. Let no one try to mislead our people," the head of state said. "We are continuing our journey by strengthening ourselves," he added. The erosion of the pound can be explained in particular by the concern of the markets about the melting of foreign currency reserves of the Turkish Central Bank, which has spent recklessly in recent months to support the national currency. It also illustrates the growing mistrust of economic governance, due in particular to the continuous decline of the Central Bank's main policy rate over the past year, while economists are urging it to raise it to tame inflation.

The depreciation of the pound has also sparked a rain of criticism and worried comments on social networks. It also heightened concerns about turkey's economy's ability to recover from the Covid-19 pandemic, which hit as the country barely recovered from its first recession in a decade.

In addition to fuelling inflation, the weakening of the pound is increasing the already crushing burden of foreign currency-denominated debt on many Turkish companies.