Turkish national currency continues to sink despite several rate hikes by the country’s central bank, making Turkey a real bargain for foreign tourists.

The Central Bank of the Republic of Turkey had spent about $200 billion to support the sinking lira in the year and a half through August 2023, exhausting its foreign exchange reserves, while keeping interest rates artificially low.

Last month, Turkey‘s central bank jacked the key interest rate by 500 basis points to 30 percent, a fourth straight hike aimed at slowing down high inflation as part of a broader policy U-turn.

A month prior, the regulator refused to allocate more foreign-exchange reserves to buy the domestic currency and manage the exchange rate. The decision to ease regulatory requirements in the banking industry then sent the lira plummeting.

Amid galloping inflation, Turkish lira is down more than 50% against the US dollar so far this year, and shows no signs of slowing down in its plunge.

Last month, the annual inflation rate increased for the third consecutive month to 61.5% in September 2023 from 58.9% in August. The highest inflation jump since December 2022 has been primarily attributed to increases in tax rates and the devaluation of the lira.

In the past, Turkish government supported low interest rates policy despite high inflation. This caused a currency crisis in late 2021 and pushed inflation above 85% last year.