Turkish currency takes a nosedive
After two relatively stable months the Turkish lira has plummeted again, hitting a record low against the euro last week. To reverse the trend and avert a serious economic crisis that has been looming for years, far-reaching reforms in business and politics are needed, commentators warn.
The future looks bleak
Hürriyet Daily News is losing all faith in the Turkish economy :
“Pessimism is on a constant growth among experts towards the government's economic and political policies including those in the realm of foreign policy. Decisions coming from Ankara are seen to aggravate rather than ease the strains on the economy. Even the most optimistic within governmental circles as well as the supporters of the government are said to be turning pessimist.”
Strong euro and cheap loans
For Naftemporiki two key factors are contributing to the Turkish lira's drop in value:
“The first has to do with the extensive consolidation of the euro, which was triggered by the decision of the European leaders to set up the 750 billion euro recovery fund - despite internal controversy - to deal with the economic consequences of the coronavirus crisis. The second factor is based on the chronic weakness of the Turkish economy and the debt bubble that has grown over the past few years. The rapid Turkish growth in the pre-corona period was based on the many cheap loans that were granted to finance construction and consumption.”
The problem is internal
The fall of the Turkish lira is not due to foreign manipulation but homemade, columnist Barış Soydan points out in T24:
“Government-affiliated economic experts claim that there is no reason for the rise of the dollar and that this is merely an operation aimed at influencing the public, but that is not true. The rise of the dollar is not inexplicable. As I tried to clarify last week, all the conditions are in place for the lira to depreciate: inflation is rising, the trade deficit is growing, the central bank is setting negative interest rates, the economy is shrinking, and nobody trusts the government.”