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Turkey's Currency Crisis (CRS Report for Congress)

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Release Date Aug. 30, 2018
Report Number IF10957
Report Type In Focus
Authors Rebecca M. Nelson
Source Agency Congressional Research Service
Summary:

Turkey, the 17th largest economy in the world, is facing a significant currency crisis. The value of its currency, the lira, has fallen by about 40% against the U.S. dollar since the start of 2018 (Figure 1). The lira lost about 25% of its value in the first two weeks of August. The collapse in the value of the Turkish lira may pose questions for Congress for foreign policy and economic reasons. On foreign policy, economic instability in Turkey could impact U.S.-Turkey relations, with tensions heightened in recent months between the two NATO allies. On the economic side, U.S. direct economic exposure to Turkey is relatively low. Nevertheless, Turkey’s currency crisis risks impacting European banks and spilling over to other emerging markets, which could have implications for the U.S. economy.