Investors are anxious concerning the Turkish economy. Thus, the Turkish lira has hit a record low of 8.15 against the dollar. Frictions with Nato allies and coronavirus hit the Turkish economy.
President Recep Tayyip Erdogan has riled the United States and France, among others.
The Turki inflation was 11.7% last month. Thus, analysts attribute this fact and the central bank’s refusal to raise its key interest rate
A rate rise could encourage investors to buy lira and dampen inflation.
President Erdogan’s regional muscle-flexing is in the Caucasus, around Cyprus, Syria, and Lybia. So, it has disconcerted investors. That is what market analysts say.
Reuters news agency quoted a Turkish foreign exchange trader. S/he said that the rising geopolitical tensions with the European Union and the United States are new sources of pressure weakening the lira.
Piotr Matys works for Rabobank. He is an analyst there. So, Matys said that there were worries that a win for United States candidate Joe Biden might mean severe sanctions on Turkey. Sanctions might be for purchasing the Russian anti-aircraft (S-400) defense system. Also, the market is worried about the rapidly deteriorating relationships between France and Turkey.
This year, the lira has lost twenty-six percent of its value. The Turkish authorities reported having spent around 103bn pounds ($134bn) in the past eighteen months propping up the currency.
President Erdogan confirmed, on twenty-three October, that Turkey tested the controversial S-400 missile system. On Sunday, Erdogan hit back at the United States criticism over the arms deal with Russia. He said that they do not know who they are playing with. Furthermore, he added to go ahead with their sanctions.
Furthermore, the United States state department warned of potentially severe consequences for their security relationship if Turkey will activate the system.
By far, the European Union is the largest of Turkey’s trading partners. Nevertheless, this month European Union leaders issued a sharp warning to Mr. Erdogan. The warning was over Turkish exploration for gas of Cyprus.
A summit made a statement. It said that the European Union deplores provocative and renewed unilateral actions in the Eastern Mediterranean by Turkey. It includes recent exploratory activities. Cyprus and Greece remain bitterly opposed to Turkey over Turkish-controlled, breakaway Cyprus.
Emmanuel Macron, the French President, is extremely critical of Turkey’s activities there. On Sunday, Erdogan accused Macron of mistreating French Muslims. Afterward, he joined calls in the Arab world to boycott French goods. Macron launched a crackdown on Islamist extremists in France.
All in all, that is the current news of the French and Turkey relationship.
- Trading Instrument