News right Now: The Fall of the Turkish Lira

Assalamu alaikum wa rahmatullahi wa barakatuhu. Welcome to News Right Now - The Fall of the Turkish Lira

Much has been said about the so-called “Turkish Model”, which refers to Turkey as an example of a modern, moderate, Muslim state that works.

Turkey’s relative political stability and economic growth has been celebrated by some who claim that Islam and secular democracy are compatible.

But the recent news of the fall of the Turkish currency has called all of this into question.

Over the past few months, the Turkish lira has lost nearly 35% of its value since the beginning of 2018.

Analysts have suggested that the fall of the Turkish lira is due to the diplomatic spat between the US and Turkey regarding the imprisoned American pastor, Andrew Brunson.
But the truth is that the case of Pastor Brunson was used to cover the actual causes of the collapse of the Turkish lira, which is a political crisis fed by the United States to strike Europe.

Over the past 10 years, the Turkish private sector borrowed billions of dollars, resulting in a $438 billion debt. The Turkish government carried a significantly smaller debt because it was carried in a large part by the private sector.

On top of that, Turkey’s trade deficit increased by 37%, meaning Turkey imported more than it sold to other countries.

Despite attempts to limit inflation to 5%, the Turkish inflation rate grew to nearly 16%... which caused debt rating agencies like Standard and Poor and Moody’s to downgrade Turkey’s classification from BB to BB-.
These credit rating agencies play a large role in shaping the economic future of any nation by influencing investors’ perceptions.

In this case, creditors feared lending to Turkey, and demanded repayment of debt, which caused the value of the Turkish lira to decline.

The reality is that the Turkish lira has been at a steady decline for months, but the recent drop wasn’t triggered by the diplomatic scuffle over Pastor Brunson... it is being used by America to strike back at the European economy. The proof for this is as follows:

The US expected the dollar to be stronger than the Euro, instead the European Central Bank tightened its monetary policy, leading investors to transfer wealth out of the US to Europe and Asia seeking better returns.

Since Europe has alot invested in Turkey, Trump used the decline of the Turkish lira to strike back at the European economy. The US knows that any trembling in the Turkish economy will create a panic in Europe because their economies are so tightly linked.

In effect, the US is using the decline of the lira to harm the European economy and strengthen the US dollar against the Euro.

What Muslims should find deplorable is how foreign, colonizing powers affect the everyday lives of the Muslims in Turkey.

It’s shameful that Muslim leaders who’ve proven their loyalty to the US stand humiliated and abandoned by their masters. The lives and economic futures of tens of millions of Muslims hang in the balance because of their subservience and reverence for their Western masters.

The situation will continue until the Muslims rid themselves of these rulers and re-establish Khilafah on the method of the Prophet (s).

Jazakum Allahu khairan for joining us. Wassalamu alaikum wa rahmatullahi wa barakatuhu.