The situation in Turkey, at least in economic terms, is far from ideal. This European Asian country is facing enormous problems, seeking urgent solutions.
Turkey is once again facing incredible economic challenges, and the latest blow came after a political scandal related to the arrest of Istanbul Mayor Ekrem Imamoglu. This event triggered a wave of protests and economic instability in the country, which was already suffering from high inflation and a decline in the value of its currency. After the arrest, the value of the lira fell by as much as 12 percent, reaching a record 42 liras to the dollar.
Central Bank intervenes
In an attempt to stop the fall of the lira, the Turkish central bank was forced to inject as much as 10 billion dollars, the largest intervention in history. Some had previously predicted that this could happen, but no one was convinced that such a large sum would be injected. Incredible, isn’t it?
Despite this move, the lira remains under huge pressure, with the exchange rate currently at 38 lira to the dollar. The political situation, which includes Imamoglu’s arrest, will only add to the worries and create more problems. The Turkish currency has weakened by 15 percent in the past year, and by 83 percent in the past five years. This situation cannot please anyone, and everything suggests that the same trend could continue unless someone decides to make changes.
Turkish stock markets have also seen huge declines. The Istanbul Stock Exchange index fell by as much as 9 percent, its worst decline in four years. The selling pressure is not abating, and economic analysts predict that this crisis could cause real chaos in this country.
Turkish President Erdogan has not yet raised his voice or reacted, but it is clear that the citizens of this country are not happy.
What will happen is very difficult to predict.
Protests are still being planned, and the citizens of this country can only hope for the best.