There was a time when Turkey's economy was admired around the world. Its geographical proximity to EU markets was an objective element that greatly aided the economy, which had become synonymous with success, as it capitalized on EU membership discussions, investors poured in cash, and the Anatolian Tigers experienced double-digit yearly growth. Between 2002 and 2007, the economy grew at a 7.2 percent annual rate, and an important aspect is that it did relatively well during the 2008 financial crisis.The Turkish lira has lost roughly 20% of its value since August 1, 2021, making it the second worst-performing emerging currency behind the Argentine peso. The worth of any currency or anything, for that matter, is determined by a variety of factors, including its scarcity in comparison to other items. For instance, if the market has an infinite quantity of liras but a finite supply of food, each lira will only buy you a small amount of food. When we compare currencies, the logic is the same. In comparison to more difficult currencies like the US dollar, the quantity of Turkish liras on the market has been steadily increasing. Turkey's wide money supply increased by roughly three-and-a-half times between 2014 and 2020, according to World Bank data, whereas the US broad money supply increased by around 50% during the same period. This has, predictably, resulted in a drop in the value of the currency of Turkish lira to drop against US dollar.
The growing supply of the currency is mostly due to Mr. Erdogan's unconventional monetary policy principles. Low interest rates, which the Turkish President believes are critical for encouraging economic growth and lowering inflation, have long been a favorite of his. The central bank regulates the money supply, which has an impact on interest rates. It increases the price of bonds and other types of debt to lower interest rates by flooding the loan market with new money (thus pushing down their yield). As a result, the entire money supply and, as a result, prices, increase.
Mr. Erdogan believes in the power of low interest rates so strongly that, since 2019, he has fired three central bank chiefs for attempting to raise interest rates in order to bolster the lira's value. Despite strong inflation, the current central bank governor has slashed interest rates and has gone on record to defend his choice. According to official data, Turkey's inflation rate is around 20%, while unofficial estimates put it around 40%. This has raised severe worries about the Turkish central bank's independence, and people have lost faith in the currency as a result.
As he prepares to contest elections next year, Turkey's president is anticipated to continue pushing for lower interest rates. Low interest rates are widely believed to enhance the economy and make voters happy, however some economists are concerned about the long-term sustainability of such debt-fueled prosperity. Lower interest rates are anticipated to increase the quantity of liras on the market, causing the currency's value to fall even lower. Many people hope that as the currency continues to depreciate, Mr. Erdogan would reconsider his decision to decrease interest rates, but this appears doubtful.
I AM CHRISTOPHER DANIEL NDUKAKU, A NIGERIAN IN A FOREIGN LAND CURRENTLY STUDYING MOLECULAR BIOLOGY AND GENETICS AT THE CYPRUS INTERNATIONAL UNIVERSITY, A BLOGGER, A MUSICIAN, AND AN ARTIST MANAGER.
In all cases currency depreciation causes loss of purchasing power and quality of life. I hope that the Turkish Lira can recover from this situation for the good of all the residents of that country
I pray it does, because i can imagine bjying a car wirth 15000 turkish lira 2020 for 50000 Turkish lira 2022
Turkey's inflation rate is around 20%, while unofficial estimates put it around 40%. İt is not true. So,
According to official data, Turkey's annual inflation rate is around 78,62%, while unofficial estimates put it around 175,5%
Dear @talkdanny29, we need your help!
The Hivebuzz proposal already got important support from the community. However, it lost its funding a few days ago when the HBD stabilizer proposal rose above it.
May we ask you to support it so our team can continue its work?
You can do it on Peakd, Ecency,
https://peakd.com/me/proposals/199
All votes are helpful and yours will be much appreciated.
Thank you!
ıt ıs really bad because we as foreıgn students here ıts makıng lıfe harder for us. And thanks for readıng my post ı feel so happy you read ıt