Turkey's currency, the lira, has ticked up since President Recep Tayyip Erdogan narrowly won a referendum designed to increase his powers: he is now effectively "a 21st-century sultan minimally curbed by parliament", says The Economist. While markets are hardly happy with Erdogan, at least the uncertainty associated with a likely new election in the event of a No vote is off the table.
But the currency, still near record lows against the US dollar, is highly unlikely to embark on a sustained rebound any time soon. It has slipped as Turkey's economic performance has ebbed and Erdogan's increasingly authoritarian tendencies have unsettled foreign investors.
When he came to power in 2003, he made an impressive start, says The Economist. "Encouraged by the IMF, he tamed inflation" which had reached 100% "and ushered in economic growth" after the 2000-2001 economic crisis. But Turkey has "gradually shifted away from the economic orthodoxy that worked so well".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
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
The growth rate has halved to around 3% since the early 2000s. Inflation has risen to a nine-year high of 11.3%, partly because Erdogan has regularly put pressure on the bank to keep rates low. Cronyism is spreading. Now, emboldened by his victory, he is set to increase his hold on the economy, hampering its performance further.
-
Paying the grandkids’ school fees could generate a shock IHT billPrivate school fees have soared as a result of the government’s VAT policy, meaning more grandparents are helping out – but what are the tax implications?
-
Number of savings deals hits record high – as interest rates slump to two-year lowSavers have more choice than ever when it comes to choosing a savings account or cash ISA. But, the interest rates on offer continue to fall. What’s next for the savings market?
-
Chart of the week: Norway’s crown has slippedCharts The Norwegian krone has slipped to a record low of more than ten to the euro.
-
Chart of the week: sterling’s sea of troublesCharts Sterling slipped to a two-year low against the greenback this week, and remains around 12% below its pre-referendum level.
-
Chart of the week: the pound’s post-war swan diveCharts The pound hit a new 20-month low against the dollar this week as Prime Minister Theresa May postponed the Brexit vote.
-
Chart of the week: The Mexican peso has peakedCharts The Mexican peso has gained 8% against the dollar this year. But that's as far as it is likely to go.
-
Chart of the week: government splits rock the randCharts The South African rand slipped by almost 3% last week, its worst five-day showing since August amid worries that President Jacob Zuma may be set to sack his competent and economically literate deputy Cyril Ramaphosa.
-
Chart of the week: Thai baht defies gravityCharts Tourism is booming, the current account is in surplus, and the yield on local assets is enticing. No wonder the Thai baht has risen by 8% against the US dollar this year.
-
Chart of the week: the loonie takes offCharts The Canadian dollar, nicknamed the loonie, has leapt to a two-year high around $1.21 against its US counterpart as a result of Canada's robust eocnomy and higher interest rates.
-
Chart of the week: a pause in the peso’s declineCharts The Mexican peso has bounced by around 5% from record lows against the US dollar in the past few days. But it has still lost 12% in a year.
