You may have heard about the Turkish currency crisis in Turkey if you are not aware of it, what exactly it is then this is for you.
Lira is the Turkish currency which has lost 28% of its value to the US dollar. Before this situation, its value was around 7.84 lira but as now it has reduced down to 5.24 against the US dollar.
In last week American President Donald Trump made a statement which strained the ties between these two countries and this decision affected the international policies deprecated the lira to five against the US dollar. Trump announced via tweet that the doubling of tariffs on aluminum and steel which will be now 20% for aluminum and 50% for steel. He even mentions that the relations between Turkey and the US are not so good.
# How the Turkish currency crisis affecting the country?
According to the economic experts, the plunging in the lira will result into increase in the inflation which will hurt Turkey’s poor.
Their economic growth will get down as increase in population by two to three percent really not a good sign.
# How can they can stand with this situation?
Turkey’s government has taken some decision to stand against this crisis.
The central bank of Turkey has announced that they will provide all liquidity to banks that they will need.
Industry minister has announced 1.2 billion industrial productions as this will soothe them little much. Qatar has announced to invest $15bn in countries financial market and banks to stand with Turkey.
Economic experts are suggesting that Erdogan (which is prime minister of Turkey) should increase the interest rate by the central bank.
# How the international market is reacting?
After lira, India’s Rupee falls down to 70.33 against the dollar which is good for there export but will make import costlier as they import 80% of oil from Gulf countries.
According to experts, this will affect the emerging economies of the world results in the poor supply of dollar.