[ad_1]
The Turkish lira registered its lowest level in history against the US dollar, as the critical hour of the US elections approaches, between the Democratic candidates “Joe Biden” and the Republican “Donald Trump.”
According to the currency exchange rate in Turkey on Tuesday, the Turkish lira registered a price of 8.54 for buying and selling, ranking first in the world, declining since the beginning of 2020 by more than 30%.
According to what the website “Al-Hurra” monitors in Turkish newspapers, expect new collapses of the Turkish lira in the next few hours, without any limit to its stop, alluding to the collapse of the lira due to its impact on the US elections , and the signs that lead to the triumph of “Joe Biden”, who is considered more rigorous than Trump towards Turkey.
The daily Sozcu reported that food prices rose 11.89%, including eggs, legumes and rice.
The newspaper quoted an economist, Enver Erkan, as saying: “Inflation has risen in line with expectations and, at the same time, the central bank took another tightening step and raised interest rates.”
The economist adds: “The fall in the value of the Turkish currency and most of the currencies of the other developing countries continues before the US elections”, noting that “additional adjustment measures have been taken since the MPC meeting. , where the interest rate did not rise on October 22, but rather decreased. ” On the lyre continues “.
What is the relationship with Biden?
“With regard to the US elections, Biden’s likely victory is related to the expectation of a tougher stance in relations between Washington and Ankara,” Erkan said.
He notes that “Biden is more positive and the dollar index is usually negative, because it will raise expectations of financial expansion in terms of the general climate of the global market … Our market views Trump’s victory in a more positive light.”
At the same time, the economist believes that “whatever the electoral results, the lira will continue to be affected by domestic internal factors as well,” including “the ambiguity of the central bank policy and the external debt situation, such as the needs of external financing and the deterioration of the inflationary dynamics “.
The government will not intervene
The fall of the Turkish lira is not a problem only today, when we look at the behavior of currencies against the dollar in the world, in weekly, annual and 3-year data, we find that the Turkish lira is among the top three currencies. low (the Venezuelan bolivar is off the list).
The latest stance on the deterioration of the Turkish government was what Turkish Finance Minister Baraat Albayrak announced today in a briefing to representatives of the Justice and Development Party in the Turkish parliament, where he said that Turkish economic indicators are “good. compared to many other countries. “
Al-Bayrak affirmed his refusal to intervene in the exchange rate “except in very exceptional cases”, considering that fluctuations in the exchange rate are witnessed by all the countries of the world as a result of the “Crown” and the US elections.
The Turkish minister considered that the exchange rate is not the only criterion for the performance of the economy, and that Turkey’s foreign exports last October reached 17 billion dollars, which is the highest number of exports in the history of Turkey. the Turkish Republic, according to Albayrak.
In a previous interview with Al-Hurra, Professor of Financial Management at Basaksehir Academy, Dr. Firas Shabu, indicated that the deterioration of the Turkish lira is linked to economic and internal factors, including external factors as well.
Shaabo says: “The internal reasons are the huge injection of money into the market, especially in light of the Corona pandemic, as the Turkish government injected more than 200 billion pounds into the market, leading to its total saturation of money”.
The economist explains that “a currency is like a commodity, the more it is offered, the lower its value.”
Shaabu points to another internal reason for the collapse, which is “the low interest rate (8.25 percent), which encouraged Turks to borrow heavily, in a scenario never seen before in the last ten years.”
The foregoing was the gateway to the collapse of the lira below 8 liras per dollar, according to the doctor in economics, who assures that exceeding the price of 8 liras is related to the lack of decision of the Central Bank of Turkey of raise the interest rate, which was directly reflected in the market.
“In addition to not raising the interest rate by the Turkish central bank, the latest indicators for the third quarter of 2020 indicate that the volume of exports in Turkey and tourism are unusually weak, and without expectations, which is also reflected in the exchange rate, “added Shaabo.
