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Turkish Lira against US Dollar.. Facts and Expectations

Turkish Lira against US Dollar.. Facts and Expectations

During the past two years , the news of the Turkish lira was and still is one of the prominent issues regarding the Turkish matter , and it is not surprising that the exchange rate of the Turkish lira against the US dollar is constantly fluctuating and we can say that it is in continuous decline . This is in fact , and if it is in the interest of foreign investors , however , the fears and anxieties are always inside every foreigner who wants to invest his money in Turkey . The gains are great and worries as well , and to better understand this we will take an example of buying real estate in Turkey , as the house whose price is 100 thousand US dollars was equal to 300 thousand Turkish lira when the exchange rate of the US dollar was 3 Turkish liras , today the same house equals 600 thousand Turkish liras , as the exchange rate of the US dollar has become approximately 6 Turkish liras , then the house has become cheaper if evaluated in US dollars , as is the case for large installations and lands . So , the foreign investor is the first beneficiary of the appreciation of the US dollar against the Turkish lira.
It is clear that the exchange rate has been stable since 2016 until the first quarter of 2018 and the increase in it is the natural increase in line with the inflation rates , except for some exceptions that accompanied political events such as the failed military coup and the end of 2016 bombings . But after the first quarter of 2018 we see the rise in the exchange rate very sharply and the reason for this was the political differences between Turkey and America and the issue of the detained priest at that time , to return once again to improve again after the release of the American detained priest . And again , it rose again in 2019 due to the local elections in Turkey and the decision to repeat the elections in Istanbul , which is the first financial city in Turkey . Finally , at the end of May , the Turkish lira is improving again , due to the improvement of political relations between America and Turkey . Looking quickly at what we wrote , we note that the exchange rate of the Turkish lira against the US dollar is fully linked to the internal and external political situations , and this does not matter to the foreign investor as much as the Turkish economy is concerned and is it an reliable economy for gains from investments or not .
It is clear that both 2017 and 2018 were good for the Turkish economy , especially after the threats and the large variation in the exchange rate of the Turkish lira against the dollar , and from it we conclude that the difference in the price of the Turkish lira does not indicate at all the status of the Turkish economy for foreigners . We cannot deny that the high dollar exchange rate against the lira affects the livelihood of the Turkish citizen , but for the foreign investor this rise has a positive effect .

 

 Turkish economy and Corona 2020 

With the beginning of the year 2020, the Turkish financial markets witnessed a slight improvement in the exchange rate of the Turkish lira against hard currencies, especially the dollar, where the exchange rate of the Turkish lira in the financial markets transactions 6.96 against the dollar, after it had recorded an exchange rate exceeding 7 lira against the dollar. The Turkish lira continues to recover against the US dollar, as the Turkish lira jumped 1.26% against the dollar during financial transactions at the beginning of this month, and the lira recorded an exchange rate of 6.71 against the dollar.
It is worth noting that the Turkish lira had faced fierce attacks from some external parties, which led to its decline against hard currencies such as the dollar, whose exchange rate crossed the threshold of 7 Turkish lira in a previous period.
Therefore, in early May of 2020, Turkey imposed a ban on dealing in cash with 3 foreign banks - BNP Paribas (French), Citibank (American), and UBS (Swiss), because it had not fulfilled its obligations to Turkish banks on time to pay the benefits.
And the Turkish Banks Authority prevented these banks from conducting foreign exchange transactions against the lira, at a time when the Turkish lira witnessed a systematic campaign aimed at hitting it against foreign currencies, especially the dollar.
And economic analysts attributed the reason for this attack, to the strength of Turkey and its ability to control the Corona epidemic quickly and with great accuracy, causing them to direct their arrows towards the Turkish economy to undermine it, stressing at the same time that Turkey is capable of turning all the tribulations it faces into grants.

Turkey has shown through its capabilities that it is one of the most powerful countries in the world during the period of combating the virus , and the Turkish government has stated that it was a pioneer in the fight against this epidemic , in recent days , Turkey has increased the number of people recovering from the Corona virus compared to the numbers of infected people , it has controlled the spread of the epidemic and made great efforts to preserve the health, safety and security of citizens and residents in Turkey , while maintaining the integrity of the economy and production within the country .

Economists expect that the recovery of the Turkish economy will start from the second half of 2020 , after the negative effects of the Corona virus locally and globally , especially in the sectors of tourism , industry and exports .
And once the daily and commercial life returns to normal , the Turkish economy , thanks to its dynamic structure , will be able to overcome the decline within a short time .
It is worth noting that the measures of the Ministry of Finance and the Turkish Central Bank have succeeded in alleviating the consequences of the virus outbreak on the local and financial economy of the country , by pumping liquidity into the markets and intervening to protect them .
To counteract the negative impact of the pandemic on the Turkish economy , the central bank has taken a number of measures , the most prominent of which is lowering interest rates to pump much-needed liquidity into the markets , and improving the cash flow of companies .

To know more about Turkish government efforts to fight Coronavirus please visit this page : Coronavirus

 

 Is real estate investment in Turkey safe under the fluctuating price of the Turkish lira ? 
The real estate market in Turkey in general , and in Istanbul in particular , is witnessing a significant recovery and development , witnessed by figures and statistics issued by the specialized institutions of statistics , where a previous statistic showed that the number of properties sold in Istanbul alone during only September of last year 2019 has reached 8 thousand and 347 properties , and the city of Istanbul is considered as one of the biggest selling points and the best types of real estate investment are available in Turkey , and the Turkish real estate market is within the budget of most investors , and the Turkish real estate market remains a safe haven for saving money in to many investors .

 

 What are the reasons that make real estate investment in Turkey safe in light of crises ? 

  1. High demand for real estate in Turkey : According to the Turkish Statistical Organization , more than 2 million homes in Turkey are sold per year , and about 45 thousand foreigners own real estate in Turkey annually .
  2. Turkey is characterized by the existence of attractive sites for real estate investment in all its forms and types , that Turkey occupies a large area of ​​the world , and is divided on the continents of Asia and Europe , and therefore its geography and nature vary according to the interests of investors .
  3. Real estate prices in Turkey are increasing encouraging annually , as the annual increase in the average real estate price in Turkey reached 10% , and in Istanbul , the annual increase in the average real estate price reached about 7% .
  4. Owners of real estate in Turkey have many advantages , including obtaining real estate residence in Turkey , and they can also obtain Turkish citizenship when purchasing a property worth $ 250.000 .
  5. The real estate market in Turkey has not suffered from any recession since 2002 , and has faced many crises without causing any damage , as Turkey has overcome the global financial crisis , as well as the attempted of July 2016 coup , and the recent crisis between it and the United States , in which the price of the Turkish Lira against the Dollar was affected significantly , and it will surpass the Corona crisis without any apparent impact on the real estate market in Turkey , as real estate in Turkey is not affected by emergency crises and it is a safe option to keep your money away from currency fluctuations , and the collapse of money and stock markets .

 

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