ANKARA: European Central Bank’s (ECB’s) stimulus program of quantitative easing (QE) will offer some breathing space to the Turkish economy, analysts and economists said.
The ECB announced that it has started buying bonds and securities as part of a 1.1 trillion euro QE program to inject liquidity into the economy. Economists highlighted that the program should offer benefits to Turkey as well. Christian Schulz, a senior economist at Berenberg Bank in Hamburg, told Anadolu Agency that if the Central Bank succeeds in boosting eurozone growth, it should be very welcome news for important trading partners such as Turkey. However, he warned Turkey that it needs to be watchful of capital inflows from the eurozone, which are temporary and are not to be mistaken for permanent inflows.
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Wolf-Fabian Hungerland, also an economist at Berenberg, stressed that the Euro is currently in a weak phase. “This lets the Turkish Lira strengthen against the Euro. Also, the Turkish Lira will be more volatile against the Dollar than the Euro.”
