IMF’S 21ST CENTURY EXAMINATION: THE TURKISH CASE

In the contemporary globalised financial economy, unexpected instabilities can cause harmful turmoil. One of these was witnessed in Turkey, in the 19th of February 2000, when the Prime Minister Bülent Ecevit and the president Ahmet Necdet Sezer went into a political dispute in a meeting about a corruption investigation. After the tense meeting Mr. Ecevit gave a negative speech about the president to the reporters, and then everything was like a pileup. The political turmoil first affected the financial markets. The stock market collapsed, the currency devaluated harshly, interest rates rocketed to %1.950 and the share prices fell %50 on the Istanbul Stock Exchange. In addition, nearly $6 billion left Turkey in a few hours which made banks stop loaning each other in cash. Therefore, the government had to intervene and the Turkish Central Bank injected billions to keep the financial markets working. For sure the impacts of the crisis were not only sudden and short terms. The extremely ...