Adverse effects of nearly 30% devaluation of Turkish currency: At present, during the COVID-19 epidemic, although the epidemic has been controlled, the impact of the epidemic has not disappeared. At present, Turkey's domestic economy has not recovered, and the consumption level of people and enterprises is low. Currency devaluation will have many adverse effects. Excessive devaluation of the currency will lead to a decline in the purchasing power of Turkish nationals, and a sharp decline in a short period of time will disturb the people's hearts at home, which is not conducive to the stable development of Turkey. For importing enterprises, currency devaluation means higher cost of purchasing raw materials, less profit margin and greater burden for enterprises. At the same time, the impact of this rising cost will eventually be shared with employees and buyers, which will bring great pressure to people's lives and business operations.
The way to restore the value of Turkish currency: raising interest rates. Raising the deposit interest rate of British Airways will curb people's speculation in the financial market and increase the deposit amount. When many people put money in the bank, the liquidity of money will be greatly reduced. When the liquidity of money is very small, people will be more inclined to buy necessities and less luxury goods, which will have an impact on some enterprises and lead to a decline in commodity prices. When commodity prices fall, the inflation rate will decrease, so the impact of currency depreciation can be recovered. However, the best way to truly eliminate currency devaluation is to develop Turkey's domestic economy, improve the purchasing level of citizens, and further enhance the ability of enterprises to resist risks, so as to completely eliminate the impact of currency devaluation by nearly 30%.