The Turkish lira depreciated by nearly 30%. What is the reason for its depreciation?

Because Turkey's long-term economic development depends largely on foreign debt financing, in order to encourage foreign capital inflow, the Turkish government has chosen a highly open capital account to facilitate capital entry and exit and maintain the independence of monetary policy.

The Turkish government can adjust its economic development by adjusting its monetary policy, which also directly affects the exchange rate performance of its own currency. The rapid growth of money and low interest rates have pushed up inflation. The highly open capital account further affected the performance of the Turkish lira.

Accumulation is the only source to expand reproduction. Without expanding reproduction, there will be no economic growth, no accumulation, no consumption and investment, and of course there will be no further economic growth.

Whether increasing consumption or solving investment, we must solve the problem of where the money comes from. By introducing foreign capital and effective domestic monetary policy, the problem of where the money comes from can be solved. However, how to effectively use capital to develop domestic productivity, fundamentally improve domestic production efficiency, improve domestic and international competitiveness, improve the quality of economic development, effectively increase domestic foreign exchange reserves, improve the level of international payment, and then maintain exchange rate stability will be an important point for the Turkish government for a long time.

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Reply time: 2021-1-10. Please refer to the latest business changes announced by Ping An Bank in official website.