The exchange rate of any national currency is of interest not only among specialists in exchange trading, but also among ordinary consumers, especially when it comes to its connection with the US dollar. The lira is not tied to the dollar and has a floating rate, which tends to frequent and sometimes significant changes.
Politics as an essential factor for changes in the exchange rate
When asking the question - what does the lira / dollar exchange rate depend on, it is important to understand that Turkey is consistently considered one of the most economically developed countries in the Eastern Mediterranean, and in the Middle East it can compete even with Israel, with which it has long-standing and close, but not very simple relations.
Therefore, speaking about the exchange rate, one can not confine oneself only to the economy, because fluctuations in rates are most directly related to the political life of the country, and in Turkey it is very diverse and complex.
Over the twentieth century, a variety of political events took place in the country: coups, coups, revolutions and colonial wars. And each such major event influenced the lira to the dollar. Very often, the lyre collapsed in the most sad way, and the country's economy did not react very well to this. On average, over the past two years, 1 dollar was worth 3.5 lira, and according to analysts, its decline will continue in the near future.
Currently, Turkey is heavily export-oriented and the depreciation of the national currency in some cases can have a positive effect on production growth. In addition, the demand for goods produced in the country also has a significant impact on swings in the Turkish currency.
Once Great Turkey: Lira to Dollar Rate
Since the eighties of the twentieth century, when Turkey headed for the opening of its economy to global financial capital, the United States has had a significant impact on the course of reform. At the same time, the local authorities managed to create the most comfortable conditions for the development of small business, family business and medium-sized enterprises. The lira against the dollar at that time was incredibly stable, and the country's export potential was realized in the best way.
Small enterprises increased the well-being of families and, in turn, began to invest money in the economy. For a long time, the main means of investment in Turkey was considered to be real estate, the market of which grew at an amazing pace for almost thirty years and became, in the end, the second most important for the Turkish economy.
Light industry and no specs
Enterprises, including family ones, created during the period of rapid economic growth and rapid accumulation of capital, grew quite quickly and became already influential players in the world market. The way the lira related to the dollar was a serious confirmation of this.
The manufacture of haberdashery and knitwear still attracts foreign buyers to Istanbul, as local products have earned a reputation for quality and safety, in comparison with competitors from Southeast Asia. However, with such successes in various areas of industrial production, Turkey has failed to achieve any significant place in the international finance market.
Dependence on Western Corporations
Turkish capital has remained largely dependent on Western funds, which scooped up money for housing, the construction of huge exhibition centers and shopping malls.
At the same time, although loans were given to Turkey at a relatively small percentage, they require a return in foreign currency, which, as mentioned above, is highly dependent on the political situation. That is why it is so important to understand how the lira relates to the dollar.
Such a strong link with European and American financiers could jeopardize the current turn in Turkey to complete independence, primarily from the European Community. However, the welfare of families involved in medium-sized businesses will be affected in the most minimal way.