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00:00Damian with Turkish lira depreciation through 17 right now sixteen point eight one. I've got the Turkish stock market up 43 percent in lira and down 37 percent year to date and U.S. dollar. It is beginning to unravel in equities. Damien what does that signal for Mr. Erdogan. Yeah well it doesn't single signal much good. I mean there may be a call for an early election. You know the elections in Turkey are scheduled for June of 2023. A lot of people are calling for a regime change. Tom and so are we at this stage. I mean look we have forecast growth in 2020 to have something on the order of three to three and a half percent. That's out the door. Annual inflation we had hoped would remain around 20 percent. That's out the door especially we get today that they're going to raise the minimum wage by 50 percent. So you know unemployment at 11 percent. Yeah. You know things are going to get worse. The history that you and I studied are global institutions to the rescue. Can the World Bank obviously the International Monetary Fund. And obviously President Biden can they rescue Mr. Erdogan. They can but they won't. And look let's be very clear. Turkey is a very very different animal altogether. Let's think about how many locals have money sitting offshore in dollar and euro deposits. Right. So when a lira declines the wealth effect on those households is actually quite good right. There isn't the first High Flyers offshore. Any towers locally is worth that much war and a depreciating lira also should in theory approve export competitiveness. But clearly this move to 17 is nothing short of spectacular. My my colleague in London Thomas Noto is looking for lira. I mean the banks are buffers here. Least they have buffers Tom. But it would need to go to 20 before the banks well over.

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Turkish Lira Depreciates, Breaches 17.00 Per U.S. Dollar

The Turkish lira depreciated more than 8% Friday to new lows against the U.S. dollar. Bloomberg Intelligence’s Damian Sassower examines Turkey’s economic issues on “Bloomberg Surveillance.” (Source: Getty Images Europe)

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