Turkey's Currency Continues To Collapse. Erdogan’s Support Sinks Further

This handout picture released by the Turkish presidential office shows Turkish President Recep Tayyip Erdogan during his visit to the Turkey-Qatar Combined Joint Force Command in Doha on December 7, 2021. mustafa kamaci/Agence France-Presse  

Market Watch: Turkish lira crumbles after S&P warns over Turkey 

The beleaguered Turkish lira was crushed on Monday after Standard & Poor’s warned it may downgrade its B+ debt rating on Turkey. 

One dollar fetched as much as 14.6412 lira, up from 13.8769 lira. The dollar has surged an astronomic 92% against the Turkish currency this year. 

S&P cited the central bank’s cutting of interest rates while inflation has been rising for the negative outlook. “In our view, the current monetary easing and significant Turkish lira depreciation will further weigh on inflation, which could peak at about 25%-30% year-on-year in early 2022. Meanwhile, we project it will also lead to net general government debt increasing by an additional 8% of GDP in 2021, compared with our previous expectation,” the agency said. 

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Update #1: As Turkey’s Currency Collapses, Erdogan’s Support Sinks Even in His Hometown (WSJ)  

Update #2: In Turkey, bread lines grow longer as inflation soars (Al Jazeera)  

WNU Editor: The next Presidential election in Turkey is on June 18, 2023 (link here). A lot can happen in Turkey from now until then.