Fall of Turkish Lira Conditioned by the Uncertainty in the Country
Since yesterday the discussions on the fall of Turkish lira has gained a new momentum. In Istanbul lira's exchange rate against the US dollar has recorded a decline of about 5 percent.
However, it should be mentioned that fall of lira has been recorded even before the general elections in Turkey. The assessments of the experts are mainly connected with the elections in the country, which were unprecedented both in terms of the incidents that took place during the election campaign and also in terms of the recorded results. The ruling AK party this year was not able to preserve the majority in the parliament, which it was holding for 13 years.
It is natural that this kind of change in the country's political field should have its consequences, particularly, contributing to the increase of uncertainty in the country. Uncertainty is the number one enemy of economic management. The main carrier of the results of uncertainty, the caused risk and sharp changes becomes the national currency exchange rate.
It is obvious that even before the elections one could notice these negative phenomena and after the elections, when it became obvious that, it seems, no coalition will be formed and the possibility for new round of elections is quite high, we witnessed a record fall of lira against dollar.
So what is the reason of the negative impact of destabilized political field on the exchange rate? In fact, the answer is lies in the trust of business-entities and those entities working with foreign capital. When business-entity invests its capital in an economic environment where there are clear rules and regulations, rules of the game of the economic management, this is another thing, but when there is a complete change of the environment, then we witness drop in confidence towards the economy, freezing of business deals until the stabilization of the situation. And now when the AK party, which for 13 years has been a majority, is not the same any more, this, most probably, will change the rules of game in the country, of business as well. Hence this is the main reason of the fall of lira.
It should be mentioned that this kind of fall of lira is a short-term change. The Central Bank of the country will make all the necessary interventions to strengthen Turkish lira. It would also not be wrong to mention that this stability will also be short-term. This will be followed by steady and slow decline of lira exchange rate. This is already the long-term effect conditioned by the upcoming changes, which are unavoidable taking into consideration the newly formed political situation and the level mistrust of the international community towards Turkey, which is growing every day. Turkey has "earned" this mistrust by its official critical statements and by calling back its ambassadors.
- Turkey Says Turning Back on S-400s 'Problematic' "It is a very problematic situation to turn back from the point we have come to. We invite (the United States) to distance themselves from threatening language such as sanctions," Akar told journalists...
- Turkey Arrests Another Former Intelligence Officer in Hrant Dink Murder Case Earlier last week, the Istanbul court ordered the arrest of two former gendarmerie intelligence officers – Volkan Sahin and Veysal Sahin – in the same case.
- Turkish Lira Exchange Rate Hits Another Record Low Against USD Earlier, Bloomberg had linked the ongoing devaluation of the lira to the fears that Ankara could become embroiled in the Nagorno-Karabakh (Artsakh) conflict between Armenians and Azerbaijanis.
- Turkey Denies Airspace for Transfer of Humanitarian Cargo to Armenia The airline did not give any sound reason. The humanitarian aid collected by the Armenian-American community was supposed to be sent to the civilians affected by the Artsakh-Azerbaijani war.
- Saudi Prince Calls for Boycotting Turkey Imports According to The New Khalij, the prince retweeted Erdogan’s remarks and wrote: "Therefore, I call for a full popular boycott for the Turkish products in order to protect the stability of Turkish economy...
Iran, Turkey Ink 3 Railroad Deals
India Moves ahead to Procure more MiG-29s and Sukhois
Russia’s FM Says Now not the Best Time to Discuss Nagorno Karabakh Status
Armenian Ambassador to Attend Biden Inauguration
5 Day Weather Forecast in Armenia
Armenia's PM Replaces Head of his Staff Eduard Aghajanyan with Released Health Minister Arsen Torosyan
Foreign Minister of Artsakh Received Representatives of the ARF Dashnaktsutyun Supreme Body of Armenia and Central Committee of Artsakh
COVID-Infected President Sarkissian to Be Discharged from Hospital Soon
Armenia Central Bank Issues New Collector Coins
President’s Office confirms receiving PM’s motion on dismissing Healthcare Minister Arsen Torosyan
Iran jails U.S. Businessman, Possibly Jeopardizing Biden's Plans for Diplomacy with Tehran
Global Coronavirus Cases Top 95 mln
European Parliament, EU Foreign Ministers to Discuss Navalny’s Detention
Ombudsman Applies to OSCE Minsk Group Co-Chairs Over Return of Armenian POWs from Azerbaijan
Russian Peacekeepers Start Demining Outskirts of Artsakh’s Martakert
Azerbaijani President’s Statements Became Slogans Inspiring Atrocities Against Armenians in Artsakh War, Armenian Ombudsman Says
Biden Administration to Have Another American Armenian Official
190 Refugees Return to Stepanakert in a Day
Artsakh Emergency Service: One of 3 fallen Soldiers Found Sunday is Identified
Armenia Records 164676 Confirmed Coronavirus Cases
Lavrov: No Provocations Against Russian Peacekeepers in Nagorno-Karabakh
Azerbaijan President's Statement Contradicts point 8 of Statement Signed on November 9, 2020: Arman Tatoyan
Artsakh Authorities Find More Bodies of Fallen Troops in Ongoing Search Operations
Artsakh Security Chief: We Could Have Avoided the War
Colorado Identifies First Known Case of UK Coronavirus Variant in US
Armenia to Import 2,250 Goods from Iran Instead of Turkey
Bodies of 1,111 Fallen Armenian Soldiers Retrieved So Far: Artsakh Emergency Service
Let's Believe that 2021 Will Restore Our Lost Dignity
Armenian, Azerbaijani Intelligence Chiefs Discuss PoW Exchange at Moscow-Mediated Meeting
Armenia Ombudsman: What Azerbaijan Military has Done is Step with Clear Intention to Intimidate Civilians
Wind: 5 km/h