Turkey: Government instability will not be short-lived

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Despite Turkish Prime Minister Recep Tayyip Erdogan’s extensive government reshuffle, the Turkish executive is facing the first serious financial consequences of the political crisis. On January 29, the central bank raised the daily interest rate from 7.75 percent to 12 percent but was unable to stem the decline of the Turkish lira against the euro and the dollar. Last June, the spontaneous protest in defense of a small park in the European part of Istanbul turned into a vast movement of opposition to the government and gave birth to a new political formation – the Gezi Party, named after the Gezi park – that will stand at the next local elections. Since the start of the protest movement, the Turkish lira has lost 20 percent of its value in six months. The decline accelerated on December 17, the day the corruption scandal struck the government, and since then the national currency has lost an additional 11 percent against the dollar. “


By Fabio Squillante


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