Dollar-hungry Turkey eyes Middle Eastern markets
Scrambling to overcome a foreign exchange crunch, Turkey’s government has outlined incentives to prop up exporters, and while Middle Eastern markets figure high on the target list, Ankara’s political conflicts with neighbors present an obstacle that needs to be addressed.
The turbulence in the Turkish economy, marked by a dramatic depreciation of the Turkish lira, is forcing Ankara to consider emergency measures. While President Recep Tayyip Erdogan led a campaign against the threat of dollarization, the government last week unveiled a package of measures to appease and buoy up economic actors. With the domestic market expected to shrink, the measures focus on encouraging exports and overseas contracting. As part of this drive to open up abroad and generate foreign exchange, the potential of Middle Eastern markets is remembered anew. Turkish traders and contractors had performed impressively in the region before wars and political conflicts hit economic ties. Whether and how they can revive that performance are issues with both economic and political question marks.
Erdogan’s call on citizens to convert dollar assets to Turkish liras appeared to bear fruit for a couple of days last week, but after regaining some ground against the dollar, the national currency began to slide again.
