Almost 76 million people are living in the Middle Eastern country of Turkey. Turkey is the third-largest nation in the world, mainly in Asia, although it also has a minor portion of its land in Europe. Turkey’s national currency is the Lira, and it is essentially an Islamic country. One Turkish Lira is equivalent to 0.35 US dollars, but market circumstances will undoubtedly change this.
The current financial crisis and its accompanying recessions are nothing new for Turkey. The crisis of 2008–2009 was the fifth to occur in the 30 years prior. Although it was followed by a program to stabilize the economy and was supported by an IMF agreement in April of that year, a financial crisis started at the beginning of 1994. After the crises in Asia and Russia, a second crisis struck in 1998 and 1999, leading to inflation of almost 60%. (Erkan 5). Before the end of 1999, a disinflationary program was implemented, and the IMF’s 17th agreement was signed. The main objectives of this agreement were to cut inflation to a single-digit level and speed up economic growth by the end of 2002. The crawling-peg exchange rate system, developed with the IMF’s approval, served as the foundation for the deflationary policy. Privatizations, reductions in the public sector, and structural changes were all heavily highlighted. However, a second crisis between December 2000 and February 2001 stopped it from succeeding. As a result, the 18th IMF pact and a floating exchange system were adopted in place of the crawling peg system. The agreement ended in 2005 without incident, but the aspirational government asked for a 19th deal to boost capital inflows and reduce currency rate fluctuations.