Turkey’s currency crisis fuels citizens’ fear impact of Lira falling against Dollar

World Today

Turkey's currency crisis fuels citizens' fear impact of Lira falling against Dollar

The Turkish lira has lost more than 40 percent of its value, since the start of 2018, and it hit record lows on Monday before recovering slightly.

Turkish President Recep Tayyip Erdogan said the country is facing an “economic war” and many Turkish citizens are concerned about the effect on their lives.

CGTN’s Michal Bardavid reports.
Follow Michal Bardavid on Twitter @michal_bardavid

Turkish President Tayyip Erdogan said on Monday that he expected attacks on Turkey’s economy to continue, but also emphasized that he predicts the Lira would soon return to what he called “rational levels.”

Most analysts said the Turkish Lira’s decline has many causes, but has been exacerbated by a political dispute between Turkey and the United States.

Angered by Turkey’s refusal to release an American pastor charged with terror links, the U.S. first imposed sanctions on two Turkish ministers and then announced last week it was doubling tariffs on Turkish steel and aluminum imports.

Turkish officials have repeatedly said they will not bow down to U.S. threats and announced several measures. The Turkish Central bank pledged to provide liquidity and cut reserve requirements for Turkish banks, while Turkey’s Finance Minister Berat Albayrak also announced the government would be implementing an economic action plan.

However, many Turkish citizens are concerned due to the Lira’s fall as the loss of value against the U.S. dollar has a direct impact on their lives. 

The weakening of the Turkish lira could also affect European markets as Turkey owes billions of dollars to European lenders.  German Chancellor Angela Merkel stressed on Monday that Germany would like to see an “economically prosperous Turkey” and that it would be in Germany’s interest as well.