No Visas For Turkey

[Guest]

The Turkish lira (-2.4% against the dollar) and the Borsa Istanbul 100 Index (-2.7%) took a beating when both the U.S. and Turkish governments announced they would stop issuing most new visas to each other’s citizens.

Even though the U.S. and Turkey are NATO allies, they’re desperately in need of couples therapy. The relationship first turned sour when Turkish President Erdogan accused the U.S. of harboring a cleric who (allegedly) instigated a failed coup in 2016. 

And now there’s this visa debacle, coming days after Turkish authorities arrested a U.S. embassy employee in Istanbul…also in connection with the coup. 

The quasi-diplomatic crisis finds the Turkish economy at a crossroads. On one hand, GDP rose 5.1% in Q2 (ahead of most developing nations) and the consumer confidence index jumped nearly 7 points. But the economy is also on the verge of overheating—YoY inflation sat above 11% for the second straight month.

A public dispute with an old friend isn’t going to help.