Emergency measures announced by president Recep Tayyip Erdogan last month have helped the Turkish lira to post a relatively calm start to 2022 after a chaotic December even as analysts remain deeply uncertain over its outlook.
New government-backed savings schemes unveiled by the authorities — combined with other steps including a multibillion-dollar intervention by the central bank — have restored temporary stability. But few analysts see those fixes as a lasting solution to Turkey’s currency dilemma, given Erdogan’s determination to keep interest rates far below the country’s rocketing inflation rate.
“I see this as electro shock therapy,” said Emre Akcakmak, managing director at Greenwest Consultancy in Dubai. “The patient was about to be lost and now it’s back to life. But did this cure the patient? I don’t think it is a long-term solution.”