Turkish lira gained value against dollar yesterday.. Why? Do you think we should be hopeful for the times they are a changin’?

The American dollar, which gained value and increased to above 6 Turkish liras in parity after the Electoral Council’s decision to re-run the mayoral election in Istanbul, slumped to below 6 liras again yesterday.

But why?

Of course, we need to understand the possible reasons of the recent volatility in dollar-lira parity in order to respond to this question.

Don’t let my phrase ‘the recent volatility‘ here mistaken you. We all know that our national currency generally loses value against most of other currencies. Within the last year, our currency suffered a freefall. [The dollar had an exchange rate of 4.2 in May last year; now, however, the rate is around 6 liras, and the exchange rate depreciation is around 50 percent.]

Almost everything is closely related to economy. Displaying an adverse image of ‘one-man rule’, deterioration in the fields of rule of law as well as rights and freedoms, drifting from one side to another in foreign policy, all these affect inevitably monetary value of our currency. Because, there is a strong mutual interdependency between democracy and markets.

Okay, but why did our currency suddenly rise in value while it was in a steady fall?