Briefing on the implications of the Turkish lira’s decline


12 April 2018

As the value of the lira continues to fall, the Turkish government faces a decisive moment in its management of the economy

  • The value of the Turkish lira has sunk to record lows amid declining international and domestic confidence in the economy
  • The potential for a currency crisis, a recurring threat to the Turkish economy, has exposed tensions in the government between those backing an orthodox policy response and others advocating an unconventional position
  • This debate is set to shape the direction of the economy ahead of crucial elections in 2019, when the ruling Justice and Development Party’s (AKP) economic record is expected to be a significant factor in the outcome

The Turkish lira has continued to depreciate, slipping to 4.156 against the dollar on Wednesday, marking a fall of around 8% since the start of the year. The decline has added to the pressure on the Turkey’s economy, which grew faster than any other major country last year, but has been hampered by rising inflation and long-standing structural weaknesses…

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