Wed, Feb 01, 2023 @ 09:47 GMT
HomeContributorsFundamental AnalysisTurkey is Slowly Becoming Argentina

Turkey is Slowly Becoming Argentina

The Turkish lira fell under immense pressure after the Financial Times reported the Turkish central bank (CBRT) used billions of dollars in short-term borrowing to bulk out its reserves. At one point, the lira was down 2% to the dollar, the lowest levels since October 2018. Concerns remain high on government’s management of their finances and comparisons are being drawn that Turkey could become Argentina.

Turkey may be too sure that they can fight off any future lira crisis, but if the reserve data continues to remain low, Turkey could in trouble. The net reserves stood at $28.7 billion last week, but when you pull out the short-term swaps, it ended up being only $16 billion.

Turkey is in a recession and if we see further weakness from the eurozone, we could see further strains on Turkey’s economic data in the next couple months. Turkey can still finance their internal position, but we could see this go in to panic mode if their situation continues to deteriorate.

MarketPulse is a forex, commodities, and global indices research, analysis, and news site providing timely and accurate information on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Featured Analysis

Learn Forex Trading