Records are being set by the stock market in Turkey. With an 11% growth in the Turkish economy in the first part of 2010, Turkey’s economy is one of the quickest rising in the world. Much of the growth can be traced to the capital of foreign countries as they try to find the best value possible. But despite this positive news for Turkish brokers and bankers, there is a negative to this currency rise. Analysts fear it could lead to an economic bubble that will burst once foreign investors discover they may get more value for their money elsewhere. The currencies of emerging markets around the world are soaring, except for the Chinese renminbi, which is controlled tightly. While countries like Brazil and Thailand are setting capital controls to reduce the amount of foreign money coming in, Turkey is merely enjoying the foreign capital. However, the stronger currency in Turkey is exacting a price, as export growth is slowed down and more imports are brought in.
Rising Turkish Currency Hurts Tourism
There is also evidence that the rising currency in Turkey is hurting the tourism trade, which is very important to the country. That usually brings in about $12 billion every year and helps to bring down the account deficit, which is the quickest growing an any emerging market. Tourists will notice higher prices at bazaars and stores. Usually tourists are able to find good deals on handbags and rugs, but there are not as many sales or bargains to be found these days.
Matt Owens
