Turkey’s Economic Bleak Outlook Fueled by Outrage Against President Endrogen

• President Endrogen under severe scrutiny – Death toll from last week’s earthquake reaches 34,000.
• USD/TRY rises towards all-time high as political tensions rise.
• US Dollar resilience holds ahead of tomorrow’s US CPI print

Turkish President Faces Scrutiny Following Last Week’s 7.8 Magnitude Earthquake

Turkish president, Tayyip Erdogen is facing rigorous scrutiny as angry citizens of Turkey condemn the government’s slow reaction to last week’s disaster. On Monday 6 February 2023, a catastrophic earthquake wreaked havoc in Turkey and Syria, killing thousands of people in the process.

At the time of writing, the death toll in Turkey has risen to 31,63 while Syria’s death toll increased to 4,574. With over 36,000 currently deceased, this number is expected to surge over both the short and medium-term.

Rescue Missions Wane One Week After Devastation Adds to Turkey’s Woes

Although machinery and equipment has been sent to the affected areas to assist in searching for any sign of life beneath the rubble, millions have been left stranded in the middle of winter. As the magnitude 7.8 earthquake becomes the origin’s deadliest natural disaster in over 80 years, the governments strict social media laws have contributed to the angst.

While law makers investigate contractors and developers responsible for constructing buildings in areas vulnerable zones, individuals who publicly lashed out on social media are now facing criminal charges.

With the elections set to take place in May, soaring levels of inflation and a depreciating currency has added to Turkey’s woes.

Now; with thousands of low and middle-income class citizens expected to face additional pressure in the wake of an economic crisis, the Lira continues to reflect the countries deteriorating outlook.

USD/TRY Price Action

Since 2017, USD/TRY has risen consistently, climbing over 400% since the September low that year.

USD/TRY Monthly Chart

Chart prepared by Tammy Da Costa using TradingView

While the January high remains as critical resistance at 18.885, the volatile currency pair remains at the mercy of Dollar strength and hopes of a change in the economic and political backdrop. As the EM (emerging market) currency currently trades at 18.842 to the USD, the aftermath of the devastation could see prices retesting the all-time high in the foreseeable future, with the potential of breaking the next psychological zone of resistance at 19.00.

USD/TRY Daily Chart

Chart prepared by Tammy Da Costa using TradingView

— Written by Tammy Da Costa, Analyst for DailyFX.com

Contact and follow Tammy on Twitter: @Tams707