ANKARA
The European Central Bank’s stimulus program of quantitative easing will offer some breathing space to the Turkish economy, analysts and economists said Tuesday.
The European Central Bank announced Monday that it has started buying bonds and securities as part of a €1.1 trillion euro ($1.075 trillion) quantitative easing program to inject liquidity into the economy.
Economists pointed out that the program should offer beneifits to Turkey as well.
Christian Schulz, a senior economist at Berenberg Bank in Hamburg, told The Anadolu Agency that if the central bank succeeds in boosting Eurozone growth, that should be very welcome news for important trading partners such as Turkey.
However, he warned Turkey that it needs to be watchful of capital inflows from the Eurozone which are temporary are not mistaken to be permanent inflows.
Wolf-Fabian Hungerland, also an economist at Berenberg, noted that the euro is currently in a weak phase. "This lets the Turkish lira strengthen against the euro. Also, the Turkish lira will be more volatile against the dollar than the euro,"
Hungerland said that debt in euros becomes easier to service. "This allows Turkish companies and consumers who have borrowed in euros to reduce their debt burden for the moment" he said.
Hungerland said that a cheaper euro will make imports from Europe to Turkey cheaper. "This will contribute to reducing inflation and allow narrowing the current account deficit faster. It will give the Turkish economy some breathing space," he added.
The Turkish lira slipped to a new record low against the dollar last week due to dollar strength. The dollar index, which calculates the value of the dollar against a basket of major currencies, hit a new high of 97.5 on Friday.
