Friday, July 8, 2011

Why Turkey Should Prepare Itself for an Economic Collapse

By Paul Quintaro

The Turkish Central Bank is engaging in reckless policy. Those invested in the country should prepare themselves for the consequences.

Despite a rising rate of inflation, the Turkish Central Bank is maintaining a policy of keeping interest rates low. The bank may be hoping to prevent the country's currency—the lira—from appreciating.

If the lira remains comparatively cheap, Turkish exports should benefit on the global market. As goods from Turkey are priced in the lira, a depreciated lira may make the goods more attractive to foreign consumers.

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