The Turkish lira is facing renewed instability, as it has recently dropped to an unprecedented low of 29 lira per $1, marking a new chapter in the financial challenges. The situation appears dire for the Turkish lira, which seems to be trapped in an unending bearish cycle. On Monday, December 11, the Turkish currency experienced a significant downturn during the trading session, sinking to new lows. Initially valued at 28.95 lira per $1 at the session's start, it quickly deteriorated to 29.01 lira per $1. Earlier in the year, the lira had maintained a relatively stable position, trading at 21 lira per $1 at the start of summer and 13.5 lira at the beginning of the year. Later, the lira joined the Russian ruble and the Argentine peso at the bottom of the emerging markets' performance list. By early November 2023, the Turkish lira had plummeted to an all-time low of 28.6 lira per $1, according to experts. Analysts attribute this dramatic plunge to the long-standing monetary policy of Turkish President Recep Tayyip Erdogan. The president has been a proponent of an unconventional economic theory, advocating for reduced interest rates to curb inflation. This approach has led to a significant depreciation of the national currency and an intense inflationary spiral. Following his re-election, Erdogan reshuffled the central bank's leadership, which resulted in a degree of stabilization. By late October, the annual inflation rate had slowed to 61.3%. Addressing these economic challenges, the central bank raised the key interest rate for the sixth consecutive time in late autumn, bringing it to 40% from 35%. The bank forecasts that by the end of 2023, the annual inflation will reach 65% but anticipates a reduction to 33% in 2024 and further down to 15% by 2025.