Lira at 3 to the Dollar Brings Turkey Recovery No Closer
Government optimism over weak lira may be misguided
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The lira has been in free fall since Turkey’s governing AK Party said last week it had failed to form a coalition government, putting the country on course for a second general election in six months.
Political instability, combined with a surge of violence following the collapse of a three-year-old peace process with Kurdish rebels, caused investors to flee the currency, which touched a record low 3 per dollar on Thursday.
Cemil Ertem, an adviser to President Recep Tayyip Erdogan, has said that level may be no bad thing if it makes Turkey’s faltering economy more competitive. Here are five charts which suggest the opposite may be true: