The sharp rise in private-sector external debt leaves borrowers exposed to a sharp weakening of the lira, especially as the boost to competitiveness from a weaker lira will be more than offset by the expected weakness of external demand, especially in 2009.All of this suggests that Turkey will aim to get an IMF deal sewn up as soon as possible.
He wheedled concessions out of Germany and France for a weaker lira and put his proposal to a vote.
Turkey's banks also were hard hit by the weaker lira, which meant that their foreign debts were suddenly more expensive.
Much of today's inflation is down to temporary factors the weaker lira, a jump in food prices and higher indirect taxes which will soon drop out of the annual rate, he says.
Volkswagen was found guilty of preventing Austrian car buyers from taking advantage of the weak Italian lira in 1995 by buying across the border.
Many skeptics of the marriage of the 11 Euroland currencies thought the groom (the rock-hard German mark) and the bride (la belle franc Franaise) were incompatible, especially since the bride brought her weak sisters (lira and peseta) into the marriage.
The lira, weak as it is, is stronger than it was (its nadir of 1,773,000 to the dollar came just before the Iraq war).
In the '80s, American and Asian tourists commonly shopped for luxury bargains in Italy, when the lira was weak against the dollar.
Paradoxically, he says, the best returns during times of inflation have often been in weak currencies like the Turkish lira.
In other words the disparities of discipline and performance were resolves by devaluing the currencies of the weak countries, and the Italian Lira, the Spanish Peseta and the French Franc were always part of it.
