Ankara is returning to currency exchange .. and a Turkish analyst: This is a temporary solution – asumetech

Turkey tries to keep the value of its national currency while die Lira due to a liquidity crisis, die Ankara can no longer hide its decline against foreign currencies and announced on Tuesday that it would hold talks on securing currency exchange agreements with 4 countries and is about to conclude an agreement with two of them.

Yesterday, Tuesday, the Governor of the Central Bank of Turkey, Shihab Kaucioglu, announced in a meeting with bank managers that his country was about to sign an agreement with two of the four countries with which Ankara is in Talks about currency exchange agreements is available. but he called die Names of none of them.

Some of the meetings with Kaucioglu told Turkish media that he had informed the bank managers of the Turkish Bankers Association that die Central bank maintained its stance on monetary tightening and die I will take the necessary steps to protect the lira.

Turkish lire

Aydin Sezer, a Turkish political scientist specializing in international affairs, stressed that “the Turkish government’s use of currency exchanges with some countries as a solution to the economic crisis no longer works,” adding that “die The reasons for this financial crisis are political, not economic, and therefore such solutions will be temporary. “

He told Al Arabiya.netthat “die Foreign exchange transactions, die die Concluding Turkey as it did before will help resolve some of the temporarily outstanding problems, but what good is that while so long die Basis of the financial crisis die The same without finding radical solutions, die die Influence the structure of the local economy. “.

According to the Turkish analyst, foreign investments have long been trusted because of the domestic policy of the Turkish judiciary and Ankara’s “problematic” foreign policy, as he called it in die Turkey lost. This exacerbated in the consequence in addition to the currency crisis die Economic crisis in Turkey.

Sezer also said that “the loss of foreign investment die Turkey caused some kind of equilibrium in to establish their relations with the United States on the one hand and Russia on the other, in particular that die local economy and die National currencies are very weak today, “and they were hit by Ankara’s volatile policy between Washington and Moscow.”

He added, “It was die Government agency, die mainly caused these two economic and financial crises by mismanagement, as a number of central bank directors were dismissed and appointed for no convincing reason. “

Turkish President Recep Tayyip Erdogan

He continued, “If die current government continues its business, there will be no sustainable solutions for die Economic and financial crisis, as it originally caused such problems. “

Currency deals with economic and financial logic are one of the ways to go on die Countries, die maintain large trade relations with other countries, resort to finance part of their trade relations.

And in Accordance with this financial mechanism becomes the value of part of the trade exchanges between the two countries in local currencies without die Use of a third foreign currency paid to die Reduce demand for foreign exchange.

Turkish President Recep Tayyip Erdogan announced earlier this month that his country had agreed with China to die increase existing currency swap facility from $ 2.4 billion to $ 6 billion.

Previously had die Turkish central bank resorted to a currency exchange with Qatar: signed in 2018 die Turkish central bank and its Qatari counterpart signed a currency exchange agreement worth five billion dollars from the Turkish lira and the Qatari riyal for bilateral trade in to facilitate the local currency and die Financial stability in to support the two countries. But die both sides changed that agreement about two years later when die Turkish lira lost about 40% of its value in May 2020.

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