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Coronavirus: Turkish Lira Crashes Dramatically - Is Erdogan Pushing Its Limits?

2020-04-30T10:12:17.633Z

The Turkish lira has fallen to its lowest level since 2018. Due to the corona crisis, the central banks have repeatedly adjusted the key interest rate. Erdogan's government is reaching its limits.



The Turkish lira has fallen to its lowest level since 2018. Due to the corona crisis, the central banks have repeatedly adjusted the key interest rate. Erdogan's government is reaching its limits.

  • The measures against the coronavirus pandemic * cut a swath across the world's economic systems .
  • The economic consequences in Turkey are catastrophic. The Erdogan government's scope for action is limited.
  • The country was stricken before. The Turkish lira is now on a critical downward slide.  
  • Here you will find the basic facts about the corona virus *. You can also see the current number of cases in Germany as a map * and the current developments in Germany *. The most important thing about the topic is also on our Facebook page Corona News. 

Update of April 29, 5:55 p.m .:  Turkish President Recep Tayyip  Erdoganhas protected a high-ranking Islam representative after his statements against homosexuals . Erdogan said on Monday that an attack on Diyanet's head of the Turkish religious organization, Ali Erbas, was an " attack on the state ". Erbas had said that Islam condemns homosexuality because it leads to diseases like AIDS.

The Turkish president emphasized what Erbas said was "absolutely right" . In his sermon at the beginning of Ramadan, Lent on Friday, the religious leader had said verbatim: "Islam regards fornication as one of the greatest sins and condemns homosexuality." Because both would bring "diseases with them".

Many people accused Erbas in the online networks of causing discord in the middle of the corona pandemic. The Ankara Lawyers' Association accused Erbas of inciting hatred of lesbians and gays. The Ankara prosecutor's office is now investigating Diyanet's complaint against the Lawyers' Association for "insulting religious values". The Diyanet Authority operates mosques in Turkey and appoints imams.

Coronavirus: Turkish lira crashes dramatically - Erdogan threatens the worst

First report from April 29:

Istanbul - The Coronavirus Pandemic * has a dramatic impact on affected countries. The economic damage * is not yet foreseeable. Experts agree that the 2008 financial crisis will be tougher.

In Turkey , the consequences are already evident. The country was previously badly hit financially - due to political disputes with the United States.

Coronavirus: Turkish lira crashes dramatically - Erdogan threatens the worst

Turkish President Recep Tayyip Erdogan regularly imposes curfews for a few days in the 31 cities affected, including Ankara, Istanbul and Izmir, in the wake of the Corona crisis. For weeks he had only restricted this for 48 hours. Finally expanded to a three-day cycle. 

The Turkish lira is meanwhile under massive pressure after numerous interest rate cuts by the Turkish central bank. On Tuesday, up to 7.62 lira was temporarily paid for one euro. This was the last amount that had to be paid for one euro in late summer 2018, when violent currency turmoil as a result of a conflict between Turkey and the United States caused the Turkish currency to plummet to a record low .

Corona crisis in Turkey: scope for measures in the corona crisis is severely limited

In August 2018, the record price of 8.12 lira was paid for one euro. Since then, the Turkish currency has tended to be under pressure. The lira exchange rate also approached the 2018 low on Tuesday in trading in the US dollar . In the afternoon, a dollar was temporarily traded for just under 7 lira. As a result, the exchange rate was only slightly below the record value of 7.23 lira, which was paid for one dollar in August 2018.

Market observers also point to a tight household situation . This limits the government's measures in the corona crisis. The Turkish central bank recently cut interest rates again. The key interest rate had been reduced by 1.0 percentage point to 8.75 percent last week. It was the eighth rate cut since last summer when the base rate was still 24.0 percent. 

Turkey hit by Corona: The Erdogan government's room for maneuver is limited

The Erdogan government's market policy room for maneuver is slowly reaching its limits. Even more: Experts see Turkish monetary policy on a risky path. On the one hand, the effects of the corona crisis and weaker inflation due to low oil prices speak for lower interest rates. On the other hand, key interest rates have long been well below the inflation rate.

The lack of economic power also has unexpected consequences. This is how dolphins keep finding their way to the Bosphorus.

Dolphins on the Bosphorus. ❤️
The animals can be seen again after driving and fishing bans in the course of combating the corona virus . # Turkey #Istanbul pic.twitter.com/s3BCzpYlSq

- Turgay (@TurgAir) April 23, 2020

nai / dpa

Source: merkur

All news articles on 2020-04-30

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