Turkey faces financial disaster
Turkey's decision-makers need to step up and change their destructive policies rather than inventing an international conspiracy to blame for the country's currency crisis.
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.
