The US sanctions against Turkey could also impact European markets, if Ankara can not come up with measures to defend its currency. Some years ago IMF and US sanctions against Venezuela caused the Bolivar currency to crash and created huge inflation.

But the Turkish Central Bank said it is ready to take all necessary measures to ensure financial stability after the collapse of the lira. It has vowed to provide banks with all the liquidity the banks need.

Consecuencias del Brexit

Turkey’s interior ministry said it was taking legal action against several US backed social media accounts it claimed had posted comments about the weakening lira in a provocative way.

The comments came after a widening diplomatic spat with the US prompted market turmoil in the country. Investors were not reassured. Although the lira rose slightly, it still hit a new record low against the dollar and stock markets in Europe and Asia fell.

The problem is the priorities of the government, when you have a lot of foreign loans from private to public sector you have to have priorities. These depend on the social and the economical revenues of the investment. It’s obvious that Ankara and the private sector did not take their priorities in an appropriate manner.

Most of the banks in Turkey are owned by European or Middle Eastern investors. So there is a possibility that this turmoil could impact European markets.

But the numbers show a different reality, luckily we are not talking double digit billions of dollars, but only single digits. When we are talking the Turkish credit market, Ankara only has 7 or 8 billion dollars of problems. These problems can be financed by the big institutions.

Sputnik / ABC Flash Point Economy News 2018.

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