​​​​​​​Experts: Turkish lira at stake of collapse, weakness to confront Covid -19

"The tough times are definitely coming, because Turkey was already in an economically weak position before it became infected with the coronavirus," Istanbul Selcuki's managing director of economic research, told CNBC.

"Unemployment in January has already reached 14%, and it will likely increase substantially due to closures due to the Coronavirus," he added.

Turkish President Recep Tayyip Erdogan announced funding for companies affected by the pandemic by $ 15 billion, as well as support for unemployment, debt deferral, and real estate debt on a large scale.

But "CNBC" said that the measures taken by Erdogan's government raised investor concerns, including a move on Monday to restrict the ability of foreigners to trade the lira in the foreign exchange market as the announcement saw the lira fall to the furthest point among emerging markets that day.

The lira faced a crisis in 2018, and this year saw the dollar rise by 13 percent as the moves of the Turkish Central Bank to artificially support the lira by selling the dollar caused Turkey's total foreign reserves to drop to its lowest level since 2009.

The Japanese MUFG expects the lira to decline to 7 against the dollar by the end of the second quarter of this year.

Turkey's foreign reserves, with the exception of gold, reached $ 77.4 billion at the end of February, according to the International Monetary Fund, yet Turkey's funding requirements for 2020 are estimated at $ 170 billion.

If any country faces a sovereign debt crisis, there are risks that will have a direct impact on emerging markets. Turkey has significant external financing needs, and a heavily indebted private sector in foreign currency, which compounds these risks,” said Agat Demaris, director of global forecasts at the Economic Information Unit.

Demaris warned that the Economic Information Unit expects a one-year recession in Turkey, in which "the big tourism sector will collapse, which will increase the pressure on the double deficit and the already fragile lira, which in turn will lead to recessionary inflation."

Many analysts say the refusal of the International Monetary Fund is political for Erdogan, describing it as economically unsound.

T/S

ANHA