The Turkish lira is nosediving again. However, it really looks like a free fall. The Turkish national currency has been dropping for the third month in a row. Economists note that it is the longest decline since 1999 when Turkey faced a devastating political crisis and two severe earthquakes.
At the moment, the country has almost the same problems. Recep Erdogan’s policy led to a slump in the value of the national currency. Notably, Western countries even did not have to impose numerous sanctions to affect the lira. The fact is that the ambitions of Turkey’s permanent president have almost destroyed the national currency. The only economic counteraction to the West was to call the Turks to financial patriotism and immediately convert the available foreign currency into the lira. Such a policy made investors leave Turkey for a long time or even forever.
Erdogan has already drained all available foreign exchange reserves and did this faster than any other emerging country in the world. Foreign investors, who owned Turkish securities in 2020, sold them off for $13.3 billion. This is the largest sell-off since 2005.
