Tashkent, Uzbekistan (UzDaily.com) -- Over the past few weeks, the rate of the Turkish national currency, the lira, has accelerated its decline against the US dollar and reached a historic low, having fallen since the beginning of this year in total by 20%. Currently, US$1 is worth 7.40 lira.

Commenting on the situation with the collapse of the Turkish currency, experts draw attention to the following factors in the economic development of the country.

1. High rates of inflation and debt load of financial institutions in Turkey. Inflation in July of this year made up 11.76%.

According to the Bank for International Settlements (BIS), Turkish banks currently have debts of about US$270 billion.

2. The fall of Turkey’s exports by almost 14% in the first 7 months of this year. In addition, according to the results of the 1st half of this year. the flow of foreign tourists, one of the main sources of foreign exchange in the country, fell by 75%.

To support the national currency and stability in the financial market, the Central Bank of Turkey has taken a number of measures.

In particular, the Central Bank has lowered the requirements for the reserves of commercial banks held by it in order to increase liquidity in the financial market. But analysts believe the move will not have a direct impact on the lira, as it does not address the key issue - the vulnerability of Turkish banks and companies due to high indebtedness.

Experts also associate the deterioration of the financial and economic situation in Turkey with the high costs of pursuing an ambitious foreign policy, incl. with the involvement of the armed forces. Ankara has been fighting with Greece for gas reserves in the Mediterranean for many years. Meanwhile, the situation has deteriorated so much that many fear a military conflict between NATO partners. Turkey is also involved in several conflicts, primarily in Syria, Iraq, Libya and Azerbaijan.

In general, experts note that the Turkish Central Bank is trying to support the lira with the help of currency interventions. But the reserves of the Central Bank are practically depleted. The Central Bank still has about US$11 billion at its disposal. The country is sinking deeper and deeper into a new currency crisis. In addition to the coronavirus pandemic, this threatens to further exacerbate economic problems.