Turkey’s economic headache bigger than Brunson standoff, US problems
Although Turkey’s dispute with the US administration over American pastor Andrew Brunson has worsened the country’s foreign currency position, the US-Turkish row is not why the lira is melting down.
Nobody wants to have a long-term relationship with the Turkish lira these days. On Aug. 6, the lira lost nearly 6% of its value against the US dollar, going from 5.10 to a low of 5.42 — its worst performance in 10 years. Since Jan. 1, the lira has depreciated 27% against the dollar and 35% against the euro. After the brief spike of 5.42 to the dollar around 11:30 p.m. local time, the lira settled in the 5.20-5.30 range.
Oblivious to the realities of globalization, the possibility of buying and selling foreign currency online and the fact that financial markets in other time zones continue to operate when Turkish markets close, many Turks on social media expressed curiosity why their money would continue to lose value after 5 p.m. (Each day, anywhere between $3 trillion to $5 trillion worth of currency is exchanged around the world.) Turkey’s pro-government media outlets blamed the “global foreign exchange lobby,” but nobody asked how Turkey’s economy and currency could be so vulnerable to speculators. Afflicted with like-minded conspiracy theories and unwilling to risk the government’s accusations of betrayal, few opposition figures and media outlets were willing to challenge the “foreign lobby” line.
