The Effect of Donald Trump’s Policies are Limited on the Lira

Turkish Lira has been men­tioned numer­ous­ly on the inter­na­tion­al finan­cial news arti­cles for the past cou­ple of months thanks to the increas­ing polit­i­cal volatil­i­ty cre­at­ed by the polit­i­cal pow­er­hous­es United States, Russia and China.

Suddenly bar­raged by back to back news orig­i­nat­ing from the U.S. President Donald Trump about trade tar­iffs on China, heavy sanc­tions against Russia and mis­siles to Syria, Turkish finan­cial mar­kets moved into an emer­gency mode where sce­nar­ios from Trade War to World War start­ed to get priced.

In hours, Turkish Lira recov­ered almost half of what it lost to Donald Trump’s unortho­dox for­eign pol­i­cy antics.”

While Donald Trump’s actions played a sig­nif­i­cant role in the Turkish Lira los­ing 10.5 per­cent of its val­ue in 29 days from March to April, crit­i­cal orders from the gov­ern­ment to the Turkish Central Bank and con­se­quent tight­en­ing poli­cies bal­anced the mar­kets. On April 18th, the dec­la­ra­tion by President Tayyip Erdoğan that Turkey will go to an ear­ly elec­tion in late June fur­ther strength­ened the Lira on an expec­ta­tion of a dis­si­pat­ing polit­i­cal uncer­tain­ty.

Turkish Lira Set to Outperform in Second Half of 2018

Turkey is one of the Emerging Market coun­tries where it is proud of the reforms done in the last 15 years, the gov­ern­ment has sig­nif­i­cant exper­tise in run­ning the econ­o­my, bank­ing sys­tem is based on a strong finan­cial foun­da­tion and the rul­ing AK Party has a vision beyond tomor­row. These ben­e­fits of these fac­tors will be crys­tal­lized after the elec­tions in June with the removal of polit­i­cal uncer­tain­ty.

About MaQasid

MaQasid is the first full-fledged inde­pen­dent port­fo­lio man­age­ment com­pa­ny in Turkey that is aligned with eth­i­cal and inter­est-free finan­cial prin­ci­ples. MaQasid in its new shape as a licensed port­fo­lio man­age­ment firm, reg­u­lat­ed by the Turkish Capital Market Board (CMB) rules and reg­u­la­tions, is man­ag­ing to scale its oper­a­tions and expand local­ly and inter­na­tion­al­ly.

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MaQasid Portfolio Management pub­li­ca­tions are pro­duced by MaQasid Portföy Yönetimi A.Ş., a Turkey based port­fo­lio man­age­ment com­pa­ny reg­is­tered with the Capital Markets Board of Turkey. The infor­ma­tion and opin­ions here­in are for gen­er­al infor­ma­tion use only. MaQasid Portföy Yönetimi A.Ş. does not guar­an­tee their accu­ra­cy or com­plete­ness, nor does MaQasid Portföy Yönetimi A.Ş. assume any lia­bil­i­ty for any loss that may result from the reliance by any per­son upon any such infor­ma­tion or opin­ions. Such infor­ma­tion and opin­ions are sub­ject to change with­out notice, are for gen­er­al infor­ma­tion only and are not intend­ed as an offer or solic­i­ta­tion with respect to the pur­chase or sales of any secu­ri­ty or as per­son­al­ized invest­ment advice.