Erdogan Economics

Turkey’s plan to stabilize its rapidly depreciating currency ideally requires the lira to not depreciate vs. the dollar. If that happens amidst rampant inflation, Turkish exports will rise in price and lose share to suddenly cheaper foreign alternatives, hammering exports. If the currency continues to meaningfully decline, the government will have to cut spending, borrow, or print money to make whole holders of depreciated liras. This won’t end well.