Turkish lira slide triggers fresh central bank intervention

[OIO]

Erdogan spent hot money on wars of aggression, foreign military operations and overseas military bases, and now he has no money to pay back.

I said before that Erdogan’s strategy is unsustainable. Without the ability of Americans to print money, Turkey learns from Americans to intervene in regional conflicts and build military bases abroad.

The world has entered a stage of instability. Countries like Turkey and India, with poor economies and large military expenditures, and without the support of reliable allies, face great risks.

 

[thetutle]

How much Australia inflation then compare it to Turkey

Do you ever think company who has debt in USD ? Usually they are big manufacturing companies, then think if they cannot pay their debt in USD means some of Turkey manufacturing will collapse too. You cannot see economy on one side only.

Turkey inflation is high, it needs to be reduced, but there is hard pill that Turkey needs to swallow to stabilize the monetary side like increasing the interest rate in order to have positive real interest rate ( interest-inflation ) in order to stabilize the Lira. If not then Lira will come to free fall just like what we are witnessing.

Everything excessive is not good, you need to study the fall of Rupiah during Asian Financial Crisis to understand that and what measure Indonesian economist do to cope with that, one of them is very high interest rate to stabilize Rupiah and avoid it to fall even further

I know that Indonesia followed the IMF and impoverished themselves and that Prime Minister Mahatir of Malaysia did not follow the IMF recommendations and made Malaysia very stable and prosperous. amongst the things Malaysia did is ban foreign held Rupiah invalid to prevent speculation, and peg the Rupiah to the dollar.

I have no idea whether this would work for turkey, but I definitely see it as an opportunity to boost local production since anything priced in dollars will be to expensive to import.

I mean its a silly situation where an iPhone will be the price of a yearly wage of a Turkish worker, despite the fact that the Turkish worker produces goods far more valuable than an iPhone. It does not add up. The currency is being manipulated and they have to stop playing that game and not purchase things from overseas, which they cant afford now anyway.

Sure there are companies with USD denominated debt, they will just have to fail, the creditors can take them over, if the creditors are foreign, the Turks can just give them US style bankruptcy protection and allow them to restructure the debt.

Its tricky but there must be a way out of currency devaluation.

 

[Indos]

I know that Indonesia followed the IMF and impoverished themselves and that Prime Minister Mahatir of Malaysia did not follow the IMF recommendations and made Malaysia very stable and prosperous. amongst the things Malaysia did is ban foreign held Rupiah invalid to prevent speculation, and peg the Rupiah to the dollar.

I have no idea whether this would work for turkey, but I definitely see it as an opportunity to boost local production since anything priced in dollars will be to expensive to import.

I mean its a silly situation where an iPhone will be the price of a yearly wage of a Turkish worker, despite the fact that the Turkish worker produces goods far more valuable than an iPhone. It does not add up. The currency is being manipulated and they have to stop playing that game and not purchase things from overseas, which they cant afford now anyway.

Sure there are companies with USD denominated debt, they will just have to fail, the creditors can take them over, if the creditors are foreign, the Turks can just give them US style bankruptcy protection and allow them to restructure the debt.

Its tricky but there must be a way out of currency devaluation.

Situation in Indonesia and Malaysia is very different. The fundamental there is quite strong. Malaysia during Mahathir period is also quite clean, much less corrupt compared to Indonesia under Soeharto. Sure export will be boosted if the currency is very low, but economics is not about export only.

We dont follow all IMF prescription like they like us to sell all of our state owned companies which we dont do it, we only sell one, Indosat in telecommunication industry, but we still have Telkom, another SOE in the sector and until now is still dominating our telecommunication sector. We are forced to follow IMF because we dont have fund to fix the economy. If we have the financial capability to fix it by ourselves then we dont need IMF. This is why we are quite fast paying the IMF money in 2008 in order for us to be able to make our economic policy free from IMF pressure.

Indonesian case show market confident is really important to stabilize Rupiah. Political settlement through the resignation of Soeharto and the start of democracy in Indonesia give huge confident on Indonesian future. This is why Habibie as Indonesian President during 1998-1999 can bring down Rupiah from 16.000 per USD into 8000 per USD. The value of Rupiah before the crisis is 2.400 per USD.

I dont need to explain more, what I said is that as Muslim we know prophet Muhammad said that if a nation is ruled by some one who is not expert then just wait the destruction of that nation. Moral story is that Erdogan is not an Economist, he is just a stubborn guy who know economy in a simple way, he doesnt know the complexity of the economy. Economy once again is not only about export and import.

 

[Beidou2020]

Erdogan spent hot money on wars of aggression, foreign military operations and overseas military bases, and now he has no money to pay back.

I said before that Erdogan’s strategy is unsustainable. Without the ability of Americans to print money, Turkey learns from Americans to intervene in regional conflicts and build military bases abroad.

The world has entered a stage of instability. Countries like Turkey and India, with poor economies and large military expenditures, and without the support of reliable allies, face great risks.

Erdogan getting weaker is excellent news for the Middle East. He is a menace and must be toppled at all costs. A weak Turkey is in the best interests of China.

 

[aziqbal]

oh dear today

 

[dani191]

Erdogan getting weaker is excellent news for the Middle East. He is a menace and must be toppled at all costs. A weak Turkey is in the best interests of China.

you dont like turkey?

 

[Arulmozhi Varman]

Remember once travelling through Turkey it was like 13-14Inr for a lira. Now it's 4 inr to a lira.
Hell for cad it's like 14 lira. Guess it's a good time to be a tourist in Turkey. Hopefully after Covid stuffs are lifted.

 

[HalfMoon]

you dont like turkey?

China and Turkiye are close friends.

Turkiye is planning to join Chinese led SCO.

This is the reason why Turkiye signed up for Chinese BRI and buying Russian S-400 weapons to move away from dependence on the US and NATO.

 

[Beidou2020]

you dont like turkey?

I have a problem with any country that supports separatists in China.

 

[HalfMoon]

I have a problem with any country that supports separatists in China.

That was history. Turkiye had amended her policy and has made friends with China since.


China seeks Turkish support for its policies on Xinjiang

• Beijing’s main aim in far western region is fighting terrorism and separatism, Foreign Minister Wang Yi tells his Turkish counterpart on trip to Ankara
• Uygurs in Turkey fear they could be extradited to China under new agreement between the two countries

China seeks Turkish support for its policies on Xinjiang

Beijing’s main aim in far western region is fighting terrorism and separatism, Foreign Minister Wang Yi tells his Turkish counterpart on trip to Ankara.

www.scmp.com

Turkey Cracks Down on Uighur Protesters After China Complains

Turkey Cracks Down on Uighur Protesters After China Complains

Some analysts see an economic motive for Turkey

www.voanews.com

 

[HalfMoon]

Erdogan spent hot money on wars of aggression, foreign military operations and overseas military bases, and now he has no money to pay back.

I said before that Erdogan’s strategy is unsustainable. Without the ability of Americans to print money, Turkey learns from Americans to intervene in regional conflicts and build military bases abroad.

The world has entered a stage of instability. Countries like Turkey and India, with poor economies and large military expenditures, and without the support of reliable allies, face great risks.

Unlike India, Turkiye is a technology super power. Turkiye will survive. This instability is temporary as Turkiye is divorcing the NATO, EU & West to join SCO, Russia & China.

 

[thetutle]

Now it's 4 inr to a lira.
Hell for cad it's like 14 lira. Guess it's a good time to be a tourist in Turkey. Hopefully after Covid stuffs are lifted.

I'm not sure, wouldn't they just rise the price of the goods sold in Lira. You just end up paying more lira, but the underlying price would be the same.

In the mind of the seller in turkey, everything is priced in USD.

 

[Arulmozhi Varman]

I'm not sure, wouldn't they just rise the price of the goods sold in Lira. You just end up paying more lira, but the underlying price would be the same.

In the mind of the seller in turkey, everything is priced in USD.

Yes and no. From a purchasing point of view Lira becomes cheaper. For example, 5 years back I would have never considered Turkey for a tour trip cos Lira was expensive. Like 14 INR for a Lira. Now I could buy 1 Lira for just 4 rupees. This cost makes it similar to expenses in INR. Tourist places are expensive through out the world. Doesn't matter if it's in India or Italy. A decent place to stay in hill stations in India could cost you 10-15k INR per night which is like 150-200 USD for a decent hotel to 4-500 USD per night for a high class hotel. In Goa/Andamans its even higher.

2 months back Maldives costed 1500USD per night on avg. But Indians are the biggest tourist groups in Maldives.

Now if people are ready to spend that much for travel and if travel expenses are similar to tourist destinations in India, they might still travel with proportionate increase in Lira included.

 

[thetutle]

Yes and no. From a purchasing point of view Lira becomes cheaper. For example, 5 years back I would have never considered Turkey for a tour trip cos Lira was expensive. Like 14 INR for a Lira. Now I could buy 1 Lira for just 4 rupees. This cost makes it similar to expenses in INR. Tourist places are expensive through out the world. Doesn't matter if it's in India or Italy. A decent place to stay in hill stations in India could cost you 10-15k INR per night which is like 150-200 USD for a decent hotel to 4-500 USD per night for a high class hotel. In Goa/Andamans its even higher.

2 months back Maldives costed 1500USD per night on avg. But Indians are the biggest tourist groups in Maldives.

Now if people are ready to spend that much for travel and if travel expenses are similar to tourist destinations in India, they might still travel with proportionate increase in Lira included.

Ok lira is cheaper and you get more lira, but everything costs more lira. So you gain what?

 

[Apollon]

Unlike India, Turkiye is a technology super power. Turkiye will survive. This instability is temporary as Turkiye is divorcing the NATO, EU & West to join SCO, Russia & China.

I like your sense of humor.