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Friday, 17 August 2018 00:00

Lira Crisis in Turkey

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Lira Crisis in Turkey


In a fairly short time, the value of the Turkish currency, Lira, has fallen by 16%. This has happened since US President Donald Trump, imposed the import tariff for Turkish steel and aluminum twice as much as before. This action was taken by Trump, after Turkey refused to  release a US priest,  Andrew Brunson, who was detained by the Turkish government for allegedly being involved in a coup 2 years ago. Before the imposition of sanctions, the US had frozen  the assets of two Turkish ministers. This was followed by Turkey in retaliation and did the same thing  to two US ministers.

After the imposition of US sanctions, Turkey immediately imposed import tariffs  more than 100 percent on products such as vehicles, alcoholic beverages, and more than 50 percent on 3 other types of products from the US. The United States is planning  to cancel the sale of super-advanced F-35 aircraft to Turkey.

Some policies were immediately taken by the Central Bank of Turkey to keep the value of the Lira from falling further. But the move cannot stop the decline in Lira. When the Turkish economy is facing problems, Qatar appears as a savior. In a meeting between Turkish President Racip Tayyip Erdogan and the Emir of Qatar, Sheik Tamim bin Hamad Al-Thani in Ankara on Wednesday (August 15, 2018), Qatar promised a substantial investment.

Meanwhile, in a statement on Twitter's social media account, Turkish  presidential spokesman Ibrahim Kalin revealed, Qatar promised a direct investment of 15 billion US dollars. Whereas before, as an  ally of the United States, Qatar had not reacted when Turkey was sanctioned by the US. Before experiencing a crisis of a decrease in the value of Lira, Turkey was also rocked by a decline in the number of tourist visits during the coup in 2016. While  every year the country records  no less than 40 million tourists visit. On the other hand, when there is a decline in Lira's value lately, tourists seem to get a blessing, because the price of international branded goods sold in Turkey also falls according to the decline in lira value against the US dollar.

The crisis that occurred in Turkey due to  US import tariffs was also experienced by several other countries. The era of globalization that causes interrelationships between countries, can make the crisis in Turkey also spread to other countries and regions. Of course, it is not expected that this crisis will occur in a long time. The question is, will  the United States continue to impose tariffs on Turkey until the country frees the detained US citizen? The world looks forward to the end of this drama.

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