ANKARA: Some 45 percent of Turkish deposits has now been converted into foreign currencies. The concern is for this to rise in a ‘dollarization panic.’ When risks increase,the foreign currency trend accelerates.
From the businessperson to the politician, from the debtor to the creditor, everybody’s eyes are on the dollar… These days the dollar is around the level of 3 Turkish Liras and does not seem to be stepping down. It looks like it will settle at around 3.10 liras by the end of October.
International developments – especially the U.S. Federal Reserve’s imminent increase of interest rates – and Turkey’s domestic climate of election speculation, political tension and uncertainty are ramping up risks. When risks increase, the trend toward foreign currency accelerates. Almost 45 percent of money in Turkish deposits has now been converted into foreign currencies. The concern is for this to rise further in a “dollarization panic.” Turkey’s experience shows that this panic state is the most dangerous of all.
