The Turkish lira is showing all indications of bouncing back from its dramatic plunge against the dollar after it received a loan from Qatar amounting to $15 billion on Thursday.
The lira crashed an all-time low against the dollar on Monday, Aug 13. As of press time, Reuters is reporting that the Turkish currency recovered sharply as it downs the dollar to 2.5 percent at 5.8052 as of 3:12 a.m. on Aug. 16. The lira stood at 5.80 after firming at 5.75 against the dollar on Wednesday.
The lira has depleted over 35 percent of its value against the dollar following an escalating diplomatic spat against the United States. The international community was concerned about how the events had been unfolding as it can have a direct impact on other emerging markets.
Indeed, Qatar came to aid to help avert the aggravating Turkey lira crisis. In an announcement first reported by the Business Insider, Tamim bin Hamad Al Thani, the Amir of Qatar, acknowledged Turkey as having a productive, strong, and robust economy. The $15 billion loan will be in the form package deposits and investment projects, he said.
Turkish President Tayyip Erdogan responded cordially, thanking the Amir of Qatar and the Qatari people for standing by his country. He described Qatar as a friendly and brotherly state, adding that he is looking forward to stronger relations in the years to come.
Turkey's currency suffered a continued blow as its diplomatic conflicts with the United States escalate and its previously warming trade relations with the country become colder once again.
On Wednesday, the White House asserted it will not remove steel tariffs on Turkey as it strongly calls for the release of Andrew Brunson, a pastor on trial in Turkey on terrorism charges. Turkish officials stood ground, saying the courts should decide on Brunson's case.
President Donald Trump had initially imposed doubled tariffs on metals exported to the United States from Turkey. In retaliation, Turkey increased tariffs on cars, alcohol, and tobacco that are being imported from the United States.
The two countries have also been debating over conflicting interests in Syria and contradictory treatment of Russia.
Meanwhile, as the Turkey lira crisis was sending the financial market into limbo, the tourism sector saw the silver lining.
While the lira had been losing its value against the dollar, travel enthusiasts were excited about the prospect of Istanbul travel being more affordable for them. The largest city and the cultural center of Turkey is one of the most popular destinations in the world. The lira crisis happened to take place at a time when the tourism season has not yet peaked, meaning all leisure spending would have been on a bargain with the lira's devaluation.
For one, tourists would only have to spend $6.62 to visit Topkapi Palace and the Hagia Sophia. USA Today noted that it cost tourists $11.30 to visit these places one year ago. A visit to Galata Tower will only cost $4.14 compared to $7.06 a year ago. A 10-course dinner at Maiden's Tower will only cost $28 compared to $47.74 last year. Even hotel accommodations were supposedly at a bargain low.
Unfortunately, these prices were estimated as the crisis was in place. Lira's reported recover on Thursday has surely changed the story altogether.
