A Middle Eastern nation called Turkey is home to almost 76 million people. Turkey is the third-largest country globally and is located in Asia, although it has a small chunk of its territory in Europe. Turkey is primarily Islamic, and the Lira is its official currency. One Turkish Lira is now comparable to 0.35 US dollars, but market conditions will inevitably cause this to change.
The financial crisis and the recessions accompanying it are nothing new to Turkey. The 2008–2009 crisis was the fifth in the previous 30 years. A financial crisis began at the beginning of 1994, although it was accompanied by a program to stabilize the economy and was backed by an IMF agreement in April of that year. After the Asian and Russian crises, a second crisis occurred in 1998 and 1999, resulting in over 60% inflation (Erkan 5). This led to the introduction of a disinflationary program and the signing of the IMF’s 17th agreement before the end of 1999. The main goals of this agreement were to accelerate economic development toward the end of 2002 and lower inflation to a single-digit level. The disinflation program was built on a crawling-peg exchange rate mechanism that was created per the IMF’s agreement. It strongly emphasized privatizations, public sector reductions, and structural changes. However, a second crisis between December 2000 and February 2001 prevented it from achieving its goals. As a result, the crawling peg system was abandoned and replaced with a floating exchange system and the 18th IMF accord. The agreement ended without incident in 2005, but the ambitious government requested a 19th pact to improve capital inflows and lessen currency rate swings.