The Turkish lira has been battered under the strain of the coronavirus. Like the Russian ruble, the Turkish currency can compete for the title of the weakest currency of 2020. Apart from serious depreciation against the US dollar, there is something in common between those currencies in terms of economic fundamentals. The monetary authorities have taken up the same stance under the economic crisis. The central banks both in Russia and Turkey claim to be taking appropriate fiscal measures to stabilize forex rates of their national currencies. Oddly enough, these efforts have been in vain. Meanwhile, the ruble and the lira have got firmly stuck at record lows. The regulators in both countries lack independence giving in to the pressure from the governments. No wonder, market participants are not interested in trading the ruble and the lira. At present, the Turkish lira has been trapped at the weakest levels since the local financial crisis of 2018. This year, the lira has tumbled over 18% against the US dollar due to inefficient monetary policy alongside the devastating impact of COVID-19. So, the country is braced for the second recession in less than two years. Turkey appealed to the Federal Reserve and other central banks for financial aid because its net forex reserves have shrunk to $25 billion in 2020 from $40 billion. Besides, Turkey has to deal with a huge public debt which has ballooned to $170 billion this year.
