Under the combined influence of negative factors such as the new crown epidemic, the conflict between Russia and Ukraine, and the rising global energy and food prices, countries around the world are facing huge inflationary pressures.


For example, the world's largest economy, the United States, has maintained a high inflation rate in recent months, for which the Federal Reserve has adopted a strategy of raising interest rates. However, the rate hike not only failed to ease inflationary pressures in the United States, but also brought direct negative effects to many emerging economies, among which the Middle East country Turkey is one of them.
It is reported that the current inflation in Turkey is as high as 80%, the highest value since 1998, and it is one of the countries with the most serious inflation in the world.


Affected by the interest rate hike in the United States, the Turkish lira has depreciated sharply since last year, and the depreciation rate has exceeded at least 40%. From the beginning of this year to the present, the lira has remained volatile and has continued to fall by more than 20% on this basis.
The shrinking of the lira has seriously affected the daily life of the local people, which has reduced the purchasing power of the people, and many people cannot afford daily necessities.


The sharp depreciation of the Turkish lira will not only affect the daily life of ordinary people, but also aggravate the financial risks in Turkey.
As the Federal Reserve resumes its interest rate hike cycle, Turkey, as a country with a relatively fragile economy in emerging markets, faces severe challenges such as capital outflows and continuous currency depreciation, and its financial risks may further intensify in the future.


From: 焦点商学
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