Home > Current Affairs,Gallery,Economy News > The cost of the operation was heavy: Earthquake in the TL, 2.8 trillion TL damage to the economy

The cost of the operation was heavy: Earthquake in the TL, 2.8 trillion TL damage to the economy

The sharp depreciation of the Turkish Lira following the operation targeting the Istanbul Metropolitan Municipality (IBB) shook financial markets. While the dollar surged by 1.5 TL in a single day, heavy losses were recorded in every category, from the external debt burden to the market value of companies. Despite the Central Bank's 10 billion dollar intervention, the economy's daily loss reached 2.8 trillion TL. Here are the details...

12punto

The cost of the operation was heavy: Earthquake in the TL, 2.8 trillion TL damage to the economy

The economic effects of the political crisis that began with the detention of Istanbul Metropolitan Municipality Mayor Ekrem İmamoğlu on Wednesday have caused a major stir.
The cost of the operation was heavy: Earthquake in the TL, 2.8 trillion TL damage to the economy

The TL experienced a depreciation of up to 12.7% during the day. As the dollar exchange rate surged from 36.50 TL to 41 TL, the Central Bank stepped in and pulled the rate to the 38 TL level with heavy sales. However, the cost of this intervention to the economy was extremely heavy.
The cost of the operation was heavy: Earthquake in the TL, 2.8 trillion TL damage to the economy

EVAPORATION IN THE STOCK MARKET

A panic atmosphere prevailed in Borsa Istanbul along with the currency shock. The total market value of companies saw a meltdown of approximately 1.2 trillion TL in a single day. Investors' flight from risk and the increasing demand for foreign currency further deepened the losses in the stock market.
The cost of the operation was heavy: Earthquake in the TL, 2.8 trillion TL damage to the economy

CENTRAL BANK BURNED 10 BILLION DOLLARS

The Central Bank sold a large amount of foreign currency to the market on Wednesday to curb the rise of the dollar. According to economists' calculations, it is estimated that 10 billion dollars (approximately 380 billion TL) were sold from the CBRT's reserves.
The cost of the operation was heavy: Earthquake in the TL, 2.8 trillion TL damage to the economy

Reminding that net reserves excluding swaps are only at the 59 billion dollar level, economists point out that reserves could melt rapidly as long as political uncertainty continues.
The cost of the operation was heavy: Earthquake in the TL, 2.8 trillion TL damage to the economy

EXTERNAL DEBT BURDEN INCREASED

Every kuruş of depreciation in the TL makes Turkey's massive external debt stock even heavier. According to Treasury data, Turkey's total gross external debt is 525.8 billion dollars.
The cost of the operation was heavy: Earthquake in the TL, 2.8 trillion TL damage to the economy

Due to the currency shock, the TL equivalent of the external debt increased by 790 billion TL in one day. Similarly, the financing cost of the 20 billion dollar current account deficit projected for 2025 also rose by 30 billion TL.
The cost of the operation was heavy: Earthquake in the TL, 2.8 trillion TL damage to the economy

The Central Bank's tight monetary policy and high TL interest rates pushed the real sector to borrow in foreign currency. According to data from the Banking Regulation and Supervision Agency (BDDK), the total foreign currency loan debt of firms reached 179.58 billion dollars.
The cost of the operation was heavy: Earthquake in the TL, 2.8 trillion TL damage to the economy

With Wednesday's currency jump, the TL equivalent of the real sector's foreign currency debt rose by approximately 270 billion TL in one day.
The cost of the operation was heavy: Earthquake in the TL, 2.8 trillion TL damage to the economy

WAVE OF PRICE HIKES IS IMMINENT

The rise in the exchange rate deeply affects not only financial balances but also the lives of households. As the dollar increases, import costs rise, and new price hikes for energy and basic consumer goods are imminent. While wages are eroding against inflation, large segments of the population are becoming even poorer.