Turkey Financial Hell Is Coming But This is Good News for Tourists: Lira Collapsed For a Fourth Day To a New Record Low

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Turkey’s lira collapsed for a fourth day to a new record low, with the sell-off spreading to other emerging-market currencies after the country’s president Erdogan showed no signs of backing down in a standoff with the U.S. 

Keep on reading Nexter.org to know more.

Lira’s epic drop 

lira-dollar-turkey-photo

Source: Ismail Ferdous/Bloomberg

Turkey has in recent years been one of the fastest-growing economies in the world, but its impressive growth numbers were fueled by foreign-currency debt. But now, Turkey’s lira slumped for a fourth day to a new record low, with the sell-off spreading to other emerging-market currencies, after the country’s president showed no signs of backing down in a standoff with the U.S.

The lira tumbled as much as 11 percent against the dollar in thin trading in Asia, before trimming losses as the central bank moved to boost lenders’ access to lira and foreign exchange liquidity. Earlier, the Banking Regulation and Supervision Agency stepped in to limit swap transactions on the battered currency.

“Turkey’s friction with the U.S. is weighing on the lira, and is unlikely to improve anytime soon,” said Takashi Kudo, head of financial markets research at Fujitomi Co. in Tokyo. “Concerns are also growing about European financial institutions due to their exposure to Turkey. All in all, emerging-market currencies are under weakening bias from all those problems.”

What is the cause of the lira slide?

lira-dollar-turkey-photo

Experts have blamed the drop in the Turkish lira on fears that the country is descending into an economic crisis.

Turkey’s stock market has also fallen 17%, while government borrowing costs have risen to 18% a year. Meanwhile, inflation has hit 15%.

Investors are worried that Turkish companies that borrowed heavily to profit from a construction boom may struggle to repay loans in dollars and euros, since the weakened lira means there is now more to pay back.

Why are Turkey and the US at odds?

The dispute centers on Turkey’s refusal to release American pastor Andrew Brunson.

Mr Brunson has been detained for nearly two years, accused of links to the outlawed Kurdistan Workers’ Party and the Gulenist movement, which Turkey blames for a failed coup in 2016.

The Turkish president is angry that the US has not taken more action against the Gulenist movement and what he said was a failure “to unequivocally condemn” the 2016 coup attempt. The US has refused to extradite Fethullah Gulen, who lives in Pennsylvania.

What you can do

Source: familytraveller

Actually, the low lira is a great opportunity for all people who like to have their vacations on Turkish beaches.  The financial crisis creates a situation when people with US dollars or euros can effort more than they used before and it will help the county as well as it brings additional financial support and investments.


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Summary
What's Going on With Turkey? Financial Crisis Led to Almost 20% Lira Drop and Here's What You Can Do
Title
What's Going on With Turkey? Financial Crisis Led to Almost 20% Lira Drop and Here's What You Can Do
Description
Turkey’s lira collapsed for a fourth day to a new record low, with the sell-off spreading to other emerging-market currencies after the country’s president Erdogan showed no signs of backing down in a standoff with the U.S. 
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