Turkish Currency Collapsing

Robert Martinez
Robert Martinez

TLDR ERDOGAN PRINTING CASH, LIRA BECOMES WORTHLESS
ELECTION ON 24 JUNE
The Turkish currency and debt crisis of 2018 is an ongoing financial crisis in Turkey with international repercussions due to financial contagion. It is characterized by the Turkish lira plunging in value, high inflation, rising borrowing costs, and correspondingly rising loan defaults. The crisis was caused by the Turkish economy's excessive current account deficit and foreign-currency debt, in combination with President Recep Tayyip Erdoğan's increasing authoritarianism and his unorthodox ideas about interest rate policy.[1][2]

A longstanding characteristic of Turkey's economy is a low savings rate.[3] Since Recep Tayyip Erdoğan assumed control of the government, Turkey has been running huge and growing current account deficits, $33.1 billion in 2016 and $47.3 billion in 2017,[4] climbing to US$7.1 billion in the month of January 2018 with the rolling 12-month deficit rising to $51.6 billion,[5] one of the largest current account deficits in the world.[3] The economy has relied on capital inflows to fund private-sector excess, with Turkey’s banks and big firms borrowing heavily, often in foreign currencies.[3] Under these conditions, Turkey must find approximately $200 billion a year to fund its wide current account deficit and maturing debt, while being always at risk of inflows drying up; the state has gross foreign currency reserves of just $85 billion.[2]

Money supply in Turkey has grown at an annual rate of 16 percent since 2014, and 18 percent since 2016. This compares to an annual growth in money supply, as calculated under orthodox economic theory by economist Steve Hanke, of no more than 13 percent in order to meet the central bank’s inflation goal of 5 percent.[12] As a consequence of these easy money policies, Turkey has experienced substantially higher inflation than other emerging markets.[13] In 2018, the lira's exchange rate accelerated deterioration, reaching a level of 4.5 USD/TRY by mid-May and of 4.9 USD/TRY a week later.

Erdoğan, who claimed interest rates beyond his control to be "the mother and father of all evil",[16] shared unorthodox interest rate theories in a 14 May interview with Bloomberg and said that "the central bank can't take this independence and set aside the signals given by the president."[14][17] Presidential interference with central bank policy comes with a general perception in international investment circles of a "textbook institutional decline" in Turkey, with Erdoğan seen increasingly reliant on politicians whose main qualifications for their jobs is loyalty, at the expense of more qualified and experienced options.[18] Erdoğan also has a long history of voicing Islamist discourse of interest-based banking as "prohibited by Islam" and "a serious dead-end".[19][20]

archive.fo/ZXZdr
en.wikipedia.org/wiki/Turkish_currency_and_debt_crisis,_2018

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archive.fo/ZXZdr

Luis Russell
Luis Russell

During the emergence of the crisis, lenders in Turkey were hit by restructuring demands of corporations unable to serve their USD or EUR denominated debt, due to the loss of value of their earnings in Turkish lira. While financial institutions had been the driver of the Istanbul stock exchange for many years, accounting for almost half its value, by mid-April they accounted for less than a third.[22] By late May, lenders were facing a surge in demand from companies seeking to reorganize debt repayments.[23] The asset quality of Turkish banks, as well as their capital adequacy ratio, kept deteriorating throughout the crisis.[24] By June Halk Bankası, the most vulnerable of the large lenders, had lost 63 percent of its US dollar value since last summer and traded at 40 percent of book value.[25]

Banks continuously raised interest rates for business and consumer loans and mortgage loan rates, towards 20 percent annually, thus curbing demand from businesses and consumers. With a corresponding growth in deposits, the gap between total deposits and total loans, which had been one of the highest in emerging markets, began to narrow.[26][27] However, this development has also led to unfinished or unoccupied housing and commercial real estate littering the outskirts of Turkey’s major cities, as Erdoğan's policies had fueled the construction sector, where many of his business allies are very active, to lead past economic growth.[28][27] In March 2018, home sales fell 14 percent and mortgage sales declined 35 percent compared to a year earlier. As of May, Turkey had around two million unsold houses, a backlog three times the size of the average annual number of new housing sales.[29]

11 June – Turkey's central bank released financial data for April, with the current account deficit widening by $1.7 billion to $5.4 billion, and the rolling 12-month deficit to $57 billion (6.5 percent of GDP), as imports continued to outpace exports. Portfolio inflows slumped to a negative $502 million in April and slid to $1.8 billion for the accumulated first four months of the year from $5.7 billion a year earlier.[52]
13 June – Turkish President Recep Tayyip Erdoğan’s senior economic adviser Cemil Ertem in an opinion piece in the Daily Sabah argued the unorthodox idea that it would be wrong to see inflation as a monetary phenomenon,[53] leading to a sharp slide in the value of the lira and of Turkey's benchmark 10-year lira bonds, with yields on the latter reaching a record-high of 16.25 percent.[54][55]

The crisis has brought considerable risks of financial contagion. According to the Bank for International Settlements, international banks had outstanding loans of $224 billion to Turkish borrowers, including $83 billion from banks in Spain, $35 billion from banks in France, $18 billion from banks in Italy, $17 billion each from banks in the United States and in the United Kingdom, and $13 billion from banks in Germany.[56][57] On 31 May 2018, the Institute of Financial Research (IIF) reported that the Turkish crisis has already spread to Lebanon, Colombia and South Africa.[58]

Isaiah Clark
Isaiah Clark

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Juan Moore
Juan Moore

turkish men are yucko :^)

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Jackson Gray
Jackson Gray

MUH BASED ERDOGAN
TURKEY STRONK

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Jose Ward
Jose Ward

reported

Chase Young
Chase Young

assblasted

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Austin Morgan
Austin Morgan

linking wikipedia and attempting to make a thread out of it
The fuck is wrong with you kikechanner? Kill yourself.

Juan Smith
Juan Smith

IMKIKEY BTFO

Asher Taylor
Asher Taylor

archive.fo/ZXZdr
omg the main link
not riding off of the facts of this situation

i didn't know TIDF was a thing, we should have known when we crushed one big kikey roach the rest would come to feed on it's carcass!

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Dominic Turner
Dominic Turner

there will never be another Kemal

Nathaniel Butler
Nathaniel Butler

It would be pleasant if Turkey decided to follow up on ridding themselves of their (((central bank))) only to discover how much international jewry dislikes that.

Isaiah Stewart
Isaiah Stewart

whiter than you ahmed

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Nathaniel Clark
Nathaniel Clark

kikepedia
Can't you use a proper fucking source?

Brandon Walker
Brandon Walker

Sensible chuckle.

Checked.

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Zachary Perez
Zachary Perez

Good. Keep bankrupting these roach countries out of existence. Euros need to make sure they never become part of the eu otherwise turks will have legal status to flood into the rest of Europe.

Elijah Bell
Elijah Bell

Turkey had around two million unsold houses

And yet all the refugees have to come to Europe.

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Dominic Nelson
Dominic Nelson

Devaluing their own currency to increase exports to Europe, now that Drumpf has sabotaged trade with EU. Turks are brilliant.

It is all coming together.

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Lincoln Bell
Lincoln Bell

turks exporting _anything_

Jeremiah Diaz
Jeremiah Diaz

This is what they get for talking shit to everyone.

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John Miller
John Miller

believing Jewish media propaganda

Levi Morris
Levi Morris

Yeah, its probably just setup that way by him or (((them))) to legitimize the process. Thus "show" in the title. Who knows though. Maybe Turkey will take a turn for the more less hostile, or maybe it will tank. I only know I don't like the way they are now with this guy holding the fapeugee tap and threatening Europe. Do you have any insight?

Noah Jackson
Noah Jackson

repeugee*

Luis Bailey
Luis Bailey

Holy shit, a financial crisis in a NATO country? I don't believe this. Must be fake news.

Carter Adams
Carter Adams

If only Brexit didn't happen, millions of Turks could be sending British gibs back to their families in Turkey to help out.

James Harris
James Harris

rising borrowing costs

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