If we analyze the economic steps taken by the Turkish government since the war in Iran began, the obvious conclusion is that it is in a "panic attack."
One indication of this is that the Turkish central bank left the interest rate at 37% this week, but don’t let this stability fool you. Behind the scenes, an economic drama is unfolding in an attempt to keep the lira afloat while the war in Iran rages.
In practice, the bank is financing the market through the "upper limit" of the interest rate (40%). This is an effective 3% increase intended to curb market pressure without officially announcing it.
Additionally, the central bank has burned about 26 billion dollars from its reserves since the start of the war, just to prevent the collapse of the lira. And to prevent social unrest, the Turkish government absorbed 75% of the fuel price increase through the Eşel Mobil mechanism. Currently, the price of a liter of gasoline in Istanbul is maintained around 60.32 lira (about 1.4 dollars).
