Turkey Currency Implosion a debt bomb of 510 Billion Dollar-Country by Country Update on Debt

Since last many years, we have seen constant depreciation of Lira against dollar. While President is busy in firing all Central Governers and Deputy Governers, Lira is facing drastic plunge against Dollar and Turkeys Stock Market (Borsa Istanbul) saw two times circuit filter in a single day. Since last few months, Lira went to 17 from 10. Its just a matter of time, the currency crisis is becoming unstoppable in Turkey as the regulators are depriving the international investors to withdraw their capital from Turkey.

But the seeds of crisis has been sown long years back. The lowering of Interest rate is just adding fuel to it. Not going into deep of this topic, today we will just reflect the debt position of Turkey.

Debt Position as on 30.09.2021

Source:BIS

So from above table we can see that Turkey is time bomb of 510.60 Billion dollar.

Now let us present data of some major countries who lended to Turkey and base on that analyse who is the major lended:

Source:BIS

Conclusion

From Country by Country reporting, it is clear that majority of European countries specially European Investment Banks are stucked with Turkey. Major victim are Spain, France, Germany, UK, US and Japan.Withing Turkey itself the people have completely become victim of Inflation and day in and day out the savings are depreciated at the cost of inflation.

The fall of Turkey is contagion for Euro as well as Asian countries. Since China is already cracking down real estate developers at a faster pace which has stopped the flow of dollar to rest of the world. On the other hand Central Banks like ECB or Fed are unwinding the position through stopping the flow of money. In such hard times Asian countries currencies can see pains due to outflow of Domestic currencies in chasing dollar.

In our next part we will elaborate currency crisis in detail. Till then enjoy.

  • By Nishant Maheshwari and Vishal Vora

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