“This time the crisis in Europe will not even touch Turkey. We are stronger this time." Turkish premier Recep Tayyip Erdogan is sure: despite the Greek situation, Ankara's coffers are not in any danger and the country's currency is not losing too much ground. “Those who complained that the lira was too strong are now complaining that the lira is too weak. Don't worry, we will find the right balance”, assured the prime minister. His words came to throw water on the fire lit by the deputy prime minister, Ali Babacan, according to whom Turkey will not be immune from a possible "earthquake" of the European economies.
Indeed, last Monday the Turkish lira, after losing 11% of its value in the last six months, collapsed to a low of 1,718 against the dollar. The Central Bank intervened by suspending the daily auctions for the purchase of dollars and by cutting the ratios of the compulsory reserves that the banks must set aside against loans. The currency rallied, but concerns mounted in Türkiye. However, Erdogan has good game in reassuring the markets, considering the latest extraordinary results of Turkish GDP, which in 2010 grew by as much as 8,9%, after the previous year's recession (-4,9%).
Furthermore, in the first quarter of 2011, the GDP rose again by 1,4% compared to the October-December period. Yet such numbers are not said to be sufficient: many fear that this rapid growth will turn out to be a factor of weakness in the medium term, which could add up to more traditional problems such as the low propensity for households to save and the growing dependence on money abroad.
