Published On: Mon, Jul 24th, 2017

German Commerzbank says Turkish-German relations pose a risk for Turkish Lira

Commerzbank’s Friday report on foreign exchange and emerging markets indicated that Turkey-Germany relations pose a risk for the Turkish lira. Noting that relations between the two countries have deteriorated considerably in recent months, the report said that Berlin officially announced a new political strategy for Turkey after the arrest of the German “Human Rights Activist.

It was underlined that with the uncertainty of fulfilling all the steps involved in the measures described it would be premature to anticipate the economic impacts on Turkey.

The report stressed that in case the German government put into effect the measure to withdraw export credit guarantees, it would quickly affect foreign direct investment inflows into Turkey.

It was also stated that the Turkish Lira had not yet been affected by the developments and this could be due to the risk appetite situation in the market currently and did not constitute a guarantee for the future.

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