As the country’s currency, lira, has fallen to an all-time low against the U.S. dollar amid fears of economic instability ahead of crucial presidential elections scheduled for later this month. The lira dropped to 4.92 against the U.S. dollar on Wednesday, down more than 5 percent since the preceding day. The Turkish Central Bank, which had scheduled a monetary policy meeting on the 7th of June, was under pressure to hold an emergency meeting to sharply increase rates by 300 basis points from 13.5 to 16.5 percent. Prompted by the measure, the lira sharply rallied to 4.55 at day-end-closing but quickly declined to a new low of 4.61, today. The currency has lost more than 20 percent of its value against the dollar since the beginning of this year. Experts believe the currency plummet is associated with the country’s rickety economy marked by high inflation and unemployment, current account deficit and external debt. “The first one is high inflation, reusing the real rate of return of the [inaudible] of the central bank of Turkey. But more importantly, concerns about the independence of the central bank, and the medium-term inflation outlook,” Chief Economist – QNB Finansinvest Burak Kanli said.
Other experts attribute the Lira tumble to Washington’s America-first policy, that attracted foreign investors to the United States at the expense of other countries around the world. Filiz Katman, Ass. Prof. Political Science and Intl. relations – Istanbul Aydin University said.
In response to the weakening Turkish economy, President Recep Tayyip Erdogan, who is campaigning ahead of the upcoming elections, also took the adopted accusations of the United States and other foreign powers “playing with Turkey’s economy,” urging Turks around the world to convert their Euros and Dollars into the Turkish lira. Turkish President Recep Tayyip Erdogan said.
Meanwhile, thousands of Turkish demonstrators marched in the streets of Istanbul to mark the eighth anniversary of the Mavi Marmara Gaza-flotilla-incident and to protest against Israel. The Mavi Marmara incident occurred in 2010, when pro-Palestinian Turkish activists attempted to breach Israel’s blocked on the Hamas-run Gaza Strip. Israel demanded from the activists to halt their progress, yet after they refused, Israeli Navy Commandos boarded the ship by force. That is when the soldiers were attacked with knives and clubs, forcing the soldiers to respond with live ammunition, which resulted in the death of ten Turkish activists and dozens of others injured. Israel ended up apologizing for the death of Turkish citizens and agreed to pay compensation to the families of the victims – an agreement that was brokered by former-U.S. President Barack Obama. While the agreement ended the rift between Ankara and Jerusalem, Turkey continues to be one of the most vocal critics of the Jewish state, and its defensive measures toward Palestinian rioters along the Gaza border with Israel – with Turkish President Recep Tayyip Erdogan calling Israel “a terrorist state.”