Turkish efforts to save the plunging lira are unsustainable in the long term given the existing US sanctions, economic and banking experts said.
The analysts stressed that the devaluation of the Turkish currency was the result of accumulated economic repercussions, noting that any efforts to stop the deterioration would only postpone the collapse, before another setback.
Dr. Abdulaziz bin Saqr, head of the Gulf Research Center, told Asharq Al-Awsat that all the evidence “indicates that the Turkish lira crisis will not end soon. The problem is political in the first place, and this is an important dimension for reading the developments.”
On the impact of the Qatari $15 billion on the Turkish lira, Bin Saqr said: “Qatar does not have the possibility of pumping directly the amount, but it promised to invest, and this needs more time… Those who read some important reports of some of the major financial banks will know the size of the financial exposure.”
For his part, Fadl al-Buainain, a financial and banking analyst, told Asharq Al-Awsat: “The Turkish lira crisis is the result of cumulative economic repercussions that have never been a major cause of the problem. Therefore, any efforts to stop the deterioration of the lira will not achieve their goal.”
Al-Buainain believes that the Qatari $15 billion support for the Turkish economy “will not resolve the current economic crisis."
“The treatment needs a greater volume of investment flows and urgent programs that contribute to economic recovery,” he said.
He pointed out that the Turkish financial sector and banks were required to pay $76 billion by the end of the year, noting that this would increase the burdens of the Turkish lira.
He also stressed that the devaluation trend began in the last 10 years and accelerated over the past four years, as a direct result of the deficit of trade balance, the increase of sovereign debt and a tripled inflation rate, in addition to the wrong political and economic strategy adopted by Turkish President Recep Erdogan.
