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The Turkish lira fell to a new low, an all-time high today, with the exchange rate hovering around 8.1 pounds to the dollar. The tensions in Turkey’s relations with the United States, its dispute with France, its dispute with Greece over maritime rights and the central bank’s policy of moderate monetary support have negatively affected the pound.
“It would be difficult for the Turkish central bank to admit more clearly that it does not want to take any action to stabilize the outlook for inflation and the pound in the face of political pressure,” an analyst at Commerzbank said in a statement. “Rising geopolitical tensions and the threat of US sanctions are further exacerbating the negative climate for the pound,” he added.
According to international analysts, Erdogan’s role in this new collapse of the Turkish pound is crucial. The Turkish president, unable to close any of the fronts that are already open in Syria, Libya, Greece, Cyprus, Saudi Arabia, S 400 and Nagorno Karabakh, is operating incendiary and opens another with the president of France, Macron. On the negative and the new record of cases on the coronavirus front mainly in the Istanbul area.
It should be noted that in one year the Turkish currency has lost more than 38% of its value against the dollar and almost 48% against the euro. This “devaluation” could not be taken advantage of this year by the country’s tourism due to the coronavirus while creating significant problems in the industry that depends heavily on imports of raw materials and fuels.
Bloomberg notes that Turkey has already spent its foreign exchange reserves faster than any other major emerging economy in an effort to support its currency.
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