For a long time, Ankara had eroded foreign currency reserves worth near 100 billion to hold the rate. Now, it has come to the end of the road. It has spent its last penny and left the rate to the markets. Thus, the “unheard of” invented exchange rate regime has collapsed.
44 pct of Turks believe conversion of Hagia Sophia an attempt to divert attention from economic crisis
Some 44 percent of Turkish people believe that iconic Hagia Sophia’s conversion into a mosque is primarily about shifting people's attention away from the current economic crisis, according to a survey conducted by Ankara-based Metropoll. “It is in vain to expect a political gain from the conversion of Hagia Sophia into a mosque, if there is such an expectation,” said Metropoll chairman Özer Sencar.
The trend in that started just before the presidential elections in 2018 and accelerated after the elections changed the chemistry of the economy in Turkey. Private sector in Turkey was restricted in every aspect. From pricing to sourcing, to investment licenses, all regulatory higher bodies worked to make the entrepreneurs feel that ‘the party state’ was watching them at every step.
The relationship between the government and the capital class is now at a deadlock. While the “Daddy State” maintains order, it now also manages the Central Bank and meddles with foreign currency. And though the AKP-led government is solely responsible for maintaining order, its economic fate depends on external factors.
Coronavirus crisis is ‘like no other’ as it hit all sectors, countries, says chief of Turkey’s top business group
TÜSİAD president Simone Kaslowski said that coronavirus epidemic has created an economic crisis “like no other” as this is also a health crisis and therefore there is no sector or country not impacted by the outbreak. “This does not resemble former crises; this is a health crisis, and there is no safe harbor left in the world. This is a global crisis and we need to tackle it as a global matter,” Kaslowsk said on May 7.
Zeitgeist Turkey | Episode 7: As Turkish lira weakens to beyond 7 against dollar Erdoğan faces a choice
Duvar English’s editor-in-chief Cansu Çamlıbel and pollster Can Selçuki are joined by political economist Esen Çağlar to discuss the underlying factors behind the accelerating loss of value of the Turkish lira against the dollar. They look for answers to how the Turkish government is caught between a rock and a hard place by rapidly selling the Central Bank reserves. They also discuss whether Ankara can secure a swap line from the U.S. without giving up Russian S-400s.
Turkey is in dire need of a source of external funding granted through a credible international institution in order to combat the economic impact of the coronavirus, according to a research of five Turkish economists. The study said that although a swap agreement with the U.S. Federal Reserve as well as the IMF could help Ankara to battle the crisis, the arrangement of a swap line alone would likely be insufficient.
Turkey was caught with the coronavirus outbreak at a time when it was weak structurally. Just like in the COVID-19 epidemic, the underlying disease story is the story of those problems in economy which were “swept under the carpet” for a long time. Turkish government's economy policies after 2018 were based on bans, limitations and covering up of the symptoms rather than resorting to necessary steps to solve the problems.