Turkey goes from bad to worse

Turkey is closer to a full-blown currency crisis than at any time in the last 15 years.

Andrew Van Sickle
By
published
in Features

Turkey "appears closer to a full-blown currency crisis than at any point since the ruling AK party took power in 2002", says the Financial Times. The lira keeps plumbing new lows against the US dollar; it has lost 10% since the start of 2017.

The problem is largely self-inflicted. Turkey's increasingly authoritarian president, Recep Tayyip Erdogan, "threatens the basic functioning of Turkey's institutions". His crackdown following a coup attempt in July has unsettled investors and local businesses. Terrorist attacks have undermined crucial tourism receipts and the sliding currency is increasing the burden of local firms' foreign debts.

In these circumstances the central bank would normally raise interest rates to stabilise the currency, but because Erdogan has constantly bullied it to keep monetary policy loose in recent years, it may not be able to act. Erdogan prefers to blame such problems on a "nefarious conspiracy of international financiers".

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Andrew Van Sickle
Andrew Van Sickle
Editor, MoneyWeek

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.

Latest