February 7, 2023

Turkish Crisis pushes Lira at record low 

 by Ralph Kratzer

Lira SymbolThe corruption scandal in Turkey has shaken the already  ailing financial market confidence in the emerging Turkish economy.

This was particularly evident on the value of the Turkish lira, which slipped to a record low in trade with the U.S. Dollar and the EURO on Friday because of the corruption scandal and the ongoing government crisis.



In addition to the currency, Turkish government bonds also fell and the stock market in the country was under massive pressure after foreign investors had partially opted from the market.

However, the current government crisis also caused turbulences in the stock market in Istanbul. At the close of the week, the descent went further on the Turkish stock market.

Stock MarketThe main stock index ISE 100 fell temporarily to the lowest level since July 2012. Recently, the indicator recovered a little and was 1.1 per cent in the red. Thus, the Turkish leading index has been lost on weekly view around 8 percent. The smaller index TO 30 fell on Friday at around 1.05 percent.

The government in Turkey has been shaken by a corruption scandal for days and is plunged into one of its most serious crises to date. Prime Minister Recep Tayyip Erdogan saw himself at last forced to a radical transformation of his cabinet. Erdogan joined a total of ten of his 26 Ministers.

“The most recent messages undermine the facade of the economic competence of the government” said U.S. investment strategist Michael Shaoul of Market Field Asset Management.

ErdoganSo far, Erdogan was the architect of the recovery in Turkey. But now MPs turn their back on the oppressed ruling party of Prime Minister Recep Tayyip Erdogan, ACP. Three parliamentarians declared their withdrawal from the ACP on Friday, as Turkish media reported.

Source: Reuters

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