President Erdogan once again emerged victorious in Sunday’s presidential elections. In the highly contested race, he secured 52 per cent of the votes, beating his rival Kemal Kilicdaroglu by four points. With challenges mounting from his previous terms, the next five years will be one of the most challenging for President Erdogan.
The biggest and most immediate crisis he is facing is the Turkish lira. Since the beginning of the economic crisis in 2018, the lira has lost over 450 per cent of its value against the US dollar. In the run-up to the elections, the Turkish Central Bank burned billions of dollars to keep the Turkish lira from sliding past the psychological 20-dollar mark. While these efforts may have created an illusion that the currency crisis is under control, it depleted the Central Bank’s net foreign currency reserves to their lowest level since 2002.
With the elections out of the way and the Central Bank’s reserves emptied, the lira is likely to experience another free fall
With the elections out of the way and the Central Bank’s reserves emptied, the lira is likely to experience another free fall.
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