Baku, Azerbaijan, Nov. 23
By Farhad Daneshvar – Trend:
There are firm indications suggesting that the sharp decline in the value of Turkish lira has contributed to Turkey’s trade balance with Iran.
The latest statistics on the foreign trade between the two countries suggest that Turkey’s imports from Iran have almost halved but its exports to the Islamic Republic saw a considerable surge over the first seven months of the current year.
Political tensions between Ankara and the White House over the upcoming trial of Reza Zarrab, an Iranian-Turkish gold trader, in the US, as well as changes to banking regulations are believed to be among the main reasons behind the fall in the value of the embattled Turkish lira which recently hit record lows against foreign currencies.
The US has accused Reza Zarrab and several senior Turkish officials of involvement in a scheme to bypass Obama-era sanctions by trading gold with Iran. In turn, Turkey accuses the US of engaging in a “clear plot against Turkey” by prosecuting a number of Turkish residents over the alleged violation of sanctions against Tehran.
The ramp-up in tensions with the US and also the fears over inflation rate in Turkey have caused concerns among investors, which eventually led to a sharp devaluation of the Turkish national currency as lira has dropped about 3.7 percent since mid-January to post $3.9594 on Thursday.
This is while Turkey’s eastern neighbor, Iran, has also experienced a considerable devaluation since the start of the year. The official rate of the Iranian rial against the US dollar has plumped by 8.8 percent since January standing at 35,235 on Nov. 23. In the meantime the value of Turkish lira in the Iranian official market has declined by 2.27 percent resting at 8,972 rials on the same day.
A group of observers believe that the slump in the value of the Turkish lira may benefit Iranian tourists and make Turkish exports much cheaper and its imports more expensive.
The latest statistics by the Iranian Trade Promotion Organization proves that Turkey’s exports to Iran over the first seven months of the current Iranian fiscal year (started March 20) have increased by 23 percent year-on-year, totaling $1.9 billion. Turkey was the fourth top exporter to Iran after China, the EU and the UAE in the mentioned period. In the meantime, Iran’s exports to Turkey slumped by 58 percent to post about $1 billion, though Turkey ranks as the seventh main importer of Iranian goods.
The devaluation of Turkish lira has apparently left a direct impact on tourism sector as well. According to Turkish statistics, the number of Iranian tourists visiting the country over the first half of 2017 exceeded 1 million, reaching the highest level of the last three years. This figure is expected to exceed 2 million by the end of the year.