World Economy

Foreign Investors Flee Turkey

Foreign Investors Flee TurkeyForeign Investors Flee Turkey

The Turkish lira is facing its biggest annual fall since 2008 and is nearing new record-lows, as foreign investment continues to leave the country. Investors from abroad have withdrawn $7.6 billion in assets this year, according to Bloomberg. This includes $1.4 billion in November, the month President Erdogan’s Justice and Development Party managed to win back the majority. At first, market reaction was positive to Erdogan’s party win, but the escalation of tension with Moscow over the downed Russian warplane in Syria has shaken investors’ nerves. Russia responded with measures intended to hit the Turkish economy where it hurts most, its tourism industry and exports to Russia. “Markets have indeed welcomed the recent election, but I think they may be overly sanguine,” William Jackson, senior emerging markets economist at London’s Capital Economics told Bloomberg. Analysts predict the lira will also continue its descent. London’s Capital Economics’ Jackson predicts an 11% decline by the end of 2016 for the lira, saying it will fall to 3.25 against the dollar.