Turkey Is Facing A Financial Crisis

A board showing the currency exchange rates of the US dollar and the euro against the Turkish lira is on display at a currency exchange office in Istanbul, Jan. 11, 2017. (photo by REUTERS/Murad Sezer)

Cengiz Çandar, Al-Monitor: Turkey faces financial disaster

Gauging the value of the Turkish lira against the US dollar has required the power of divination so far this year. Anxiety is high as Turks wait to see whether the lira will tumble more and reach the once-unimaginable level of 4 lira per $1.

In the first days of 2017, the lira's value declined so rapidly that even the Turkish Central Bank’s actions could not stop the drop. On Jan. 10, the bank lowered the level of foreign exchange reserves so it could add $1.5 billion of liquidity to stabilize the lira's value.

Less than six months ago, when the parity level was 3 lira to $1, the gloomy forecast for 2017 predicted parity could reach 3.85 and stay there until 2018. Within the first 10 days of 2017, the level exceeded that figure, and on Jan. 12, parity temporarily surpassed the “psychological threshold” of 3.90.

Now, 4 lira to a dollar is entirely possible and is seen as a harbinger of the big financial crisis to come.

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WNU Editor: Turkey's tourism industry has been crushed. They are at war against their Kurdish population. They are now directly involved in the Syrian and Iraqi wars. There is now a policy of political repression against opponents of President Erdogan. There are 3 million plus refugees in the country. And on top of all of that .... Turkey's relations with the Eu and with the U.S. are in the toilet. I am not surprised that Turkey is facing a financial crisis .... I am just surprised that they are not completely in it right now.